Adani Ports & Special Economic Zone Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Record quarter, strategy delivering: All-time highs across revenue, EBITDA, free cash flow and ROCE as the redefined Logistics, Marine and International Ports strategy showed its second consecutive quarter of results.
• Market share widened to 28.1%: Domestic ports grew 1.6x to 1.7x cargo growth in maritime, with coking coal and coastal coal share gains offsetting EXIM coal and iron ore weakness.
• International ports margin target reset sharply upward: Management expects stabilized EBITDA margins to reach ~45% (from 26%), with Colombo at ~50%, Haifa at 30–40% and Australia at ~65%.
• Full-year EBITDA guidance held, not raised: Despite H1 already achieving half the ₹21,000–22,000 crore range, management declined to comment on revision, saying "results will show."
• What to watch next quarter: Whether Mundra container recovery sustains beyond October’s 720,000 TEUs, Dhamra margins normalize as promised, and any closure on Gujarat concession renewals.

Domestic Ports: Volume, Mix & Market Share

• Volume growth outpacing trade: APSEZ growing 1.6x to 1.7x maritime cargo growth, lifting market share from 27.4% to 28.1%.
• Commodity mix in motion: EXIM coal and iron ore declined all-India and at APSEZ, but coking coal market share rose from 36.5% to 41.9% and coastal coal share from 27.8% to 31.1%, driven by Make-in-India substitution of imported coal.
• Mundra container recovery underway: Containers were challenged during Operation Sindoor and by geopolitics redefining cargo flows, but month-on-month growth returned and October exceeded 720,000 TEUs. Power plant configuration and imported-coal dependency remain a headwind.
• RORO car exports up 32% YoY in H1 at Mundra, clubbed under the dry cargo segment.
• Capacity utilization tight but manageable: Some ports running at 90–92% utilization with no congestion issues; management policy is to have supply ready ahead of demand.
• No margin compression expected for domestic ports this year; operational excellence initiatives could lift margins, with a sustainable range of 75–77% over the long period.

Gupta: "APSEZ policy has always been be ready with the supply, so that when demand comes, we can deliver the best-in class customer satisfaction with the minimum turnaround time of the vessel, of the evacuation, and this is where we are doing."

International Ports: Margin Trajectory & Expansion

• Margin ambition radically upgraded: Management expects stabilized EBITDA margins to move from 26% to approximately 45% across the portfolio, with Colombo at ~50%, Haifa at 30–40% and Australia at ~65%, driven by leadership, technology and automation.
• Colombo ahead of plan: Delivered its third consecutive month of 100,000 TEU+ and Phase-2 expansion has been pulled ahead because both volume and margins are tracking ahead of schedule.
• H1 volumes disclosed under pressure: Haifa handled 0.53 crore metric tons, Tanzania 0.7 crore and Colombo 0.55 crore; management does not normally provide per-port volume breakdowns.
• Tanzania berth elongation and Haifa cruise terminal restart are incremental capacity moves already underway.
• Australia (NQXT) awaiting final approval: Progressing smoothly with the Department of Government; management expects it "should happen soon."
• International capex remains routine for now, with nothing very large on the immediate horizon.

Logistics & Marine: New Engines Firing

• Logistics growth exponential: Ramp-up in asset-light trucking, international freight network services and sweating of hard assets drove the quarter.
• Trucking business on track: Tech platforms are scalable with chain-of-custody tracking and control mechanisms already in place.
• Logistics margin target set at 40–45% over time for the non-IFN, non-trucking business, though gestating businesses will remain in the portfolio.
• Marine growth from vessel acquisitions: Ready-to-deploy platform supply vessels and a workboat acquired in the Middle East, plus expansion into West Africa waters; Southeast Asia is the next target.
• Marine market share capped at 75% in India; 8 tugs to be added over 2027–2028, with almost half already contracted.
• Kochi Logistic Park: ₹600 crore investment announced for a 0.13 crore sq ft facility.

Geopolitics & Supply Chain Redefinition

• Q2 marked the first visible quarter of supply chain redefinition from geopolitics and trade policy shifts, with India seeing an imbalance between import (40-foot) and export (20-foot) containers.
• Management frames geopolitics as opportunity, not risk: Four big pillars are bringing business and trade to India, and the 11,000 km coastline creates a structural coastal coal opportunity as imported coal is replaced.
• Liquids opportunity emerging for 2027: Supply chain redefinition is creating a clear opening; APSEZ is investing in tank farms at Hazira (opening up tanks now, capacity increasing next year) and may invest at Krishnapatnam and Gangavaram.
• Container is the main growth driver for next year, with new Mundra capacity opening up.

Gupta: "I think we should just see this geopolitical impact as an opportunity and not as a risk."

Capital Allocation & Balance Sheet

• Five-year capex plan of ₹75,000 crores: Key growth levers include NQXT in Australia, Dhamra expansion, Vizhinjam Phase-2, Colombo Phase-2, Kochi logistic park and marine vessel acquisitions.
• Capacity to nearly double: From 63.3 crore metric tons to 110-120 crore metric tons over five years, with ₹45,000–50,000 crores of the capex allocated to ports. Container capacities get first priority.
• Marginal expansions, not new greenfield ports: Management expects no margin drop from the capacity build-out because these are incremental additions to existing assets.
• Leverage policy at 2.5x net debt/EBITDA: Currently well under that level; management expects to catch up to the 2.5x profile as the investment cycle accelerates.
• Capital allocation waterfall: Cash deployed first in organic growth (up to ₹75,000 crores over five years), then M&A, then evaluation between lender repayment and enhanced cash returns to equity holders.
• Return on equity target of 16% on all investments, measured on a fully absorbed project-life basis.
• Cash flow conversion expected to stay at ~85% for the full year, consistent with H1; the business carries minimal receivables and inventory.
• Fitch Ratings revised APSEZ’s outlook to Stable from Negative; management expects all rating agencies to reflect a stable outlook in coming months.

Gupta: "But on the other side, it should be a meaningful 100 crore metric ton, which means achieving the volume with the increase in market share, which is generating better financial discipline, financial return is also equally important, same as volume."

Dhamra & One-Off Items

• Dhamra Q2 margins not representative: Depressed by one-off repairs and maintenance plus a lower iron ore cargo mix; management expects margins to normalize in Q3 and Q4.
• No pricing difference between EXIM and coastal coal for APSEZ at Dhamra; price differences exist only between players with assured volume or take-or-pay commitments.
• JV income movement explained: ₹350 crores of dividend from a Mundra subsidiary/joint venture appeared in other income rather than share of profit in joint ventures, creating a shift between line items. Dhamra LNG business is ramping up.
• Mundra EBITDA margin pattern from Q1 to Q2 is seasonal and consistent with last year: Q2 volume slightly lower but mix oriented toward higher-value cargo like fertilizer, plus some FX-linked price increases. Nothing one-off or episodic.

Guidance & Commitments

Key Metrics