The Gujarat government has signalled plans to extend port concessions for Gujarat Pipavav and Adani Ports' facilities, including the flagship Mundra port. According to reports from Jefferies and Investec, the Gujarat Maritime Board has issued a "Letter of Comfort" to Gujarat Pipavav Port and Adani Ports' Mundra and Pipavav ports, indicating its intention to extend their concessions. Under the process, the port operators have been asked to submit investment plans before the state government decides on the extensions. The proposed extensions would cover concessions at multiple ports, with final terms still awaited. As reported by Jefferies, the extensions are expected to depend on the port operators' response to tariff-sharing and investment commitments, with this development removing a major overhang and lending growth visibility for both operators.
The development provides significant visibility for Adani Ports and Special Economic Zone Ltd, as reported by Jefferies and Investec. The company's three Gujarat ports — Mundra, Hazira and Dahej — account for 49% of the company's domestic port capacity. Investec noted that greater certainty over the Mundra concession would support the company's expansion plans at the port, with the brokerage saying the extension could improve the company's ability to invest and expand capacity. Jefferies noted that greater clarity on the concessions would give the company visibility as it plans further capacity expansion at these ports. For Adani Ports, the brokerage said the extensions improve visibility for its key ports, supporting its more constructive Buy call on the larger operator.
Investec reports that Adani Ports plans to increase Mundra's container capacity by more than 50% over the next five years and has received environmental clearance for the project. The brokerage expects the port to benefit from its strong position in the market, with no major capacity additions planned by rival Adani Ports facilities at Vadinar over the next five years. Investec said the company is pursuing a significant expansion in container handling capacity at the port as it prepares for future growth in demand and supply. The concession extension is viewed as a positive event for Mundra, with Investec noting that Mundra is well placed to benefit from growth in container volumes over the coming years.
According to Jefferies, Adani Ports operates Mundra with 274 million tonnes per annum of capacity, while Hazira and Dahej have capacities of 32 million tonnes and 16 million tonnes, respectively. The concession agreements for Mundra, Dahej and Hazira are due to end in February 2031, 2033 and March 2035, respectively. As reported by Jefferies, the ports are currently operating at 66%-93% utilization. Investec noted that the proposed concession extensions would support Adani Ports' development plans for Dahej and Hazira, with the brokerage saying the concession extension is a positive event for these ports as well.
Investec maintains a buy rating on Adani Ports and expects the company to deliver a 14% compound annual growth rate in EBITDA between FY26 and FY30 from its existing ports and businesses. The brokerage said the company trades at about 14 times its estimated FY28 enterprise value to EBITDA. Jefferies maintains a buy rating on Adani Ports with a target price of ₹2,160, based on 16 times September 2028 estimated enterprise value to EBITDA. Investec noted that opportunities for inorganic growth and a potential increase in India's global trade, including through free trade agreements, could provide further support to growth. The company has indicated plans to add about 100 million tonnes of container capacity at Mundra over the next five years.
