Motilal Oswal has reiterated its buy rating on Adani Ports and SEZ (APSEZ) with a target price of ₹2,130, according to the research report dated July 29, 2026. The brokerage firm's recommendation is based on a valuation of 17x FY28E EV/EBITDA multiple. Despite the strong Q1FY27 performance, the stock dropped by almost 3% following the results announcement, reflecting short-term market sentiment rather than fundamental business strength. The target price represents significant upside potential of almost 24% from current market levels, with total upside expected from different brokerage valuations reaching as high as 28%.
Adani Ports & SEZ reported strong Q1FY27 results with revenue growth of approximately 19% year-on-year to ₹108 billion, which was in line with expectations. Cargo volumes increased 15% YoY to 138.1 million metric tonnes, driven primarily by international trade volumes. EBITDA margin expanded to 60.4% compared to the previous year, surpassing Motilal Oswal's estimate of 57.8% by 20 basis points. EBITDA grew 19% YoY to ₹65 billion, coming in 5% above the brokerage's estimates, while adjusted profit after tax increased 10% YoY to ₹37 billion. The results comfortably exceeded several market estimates, reflecting robust cargo volumes and higher revenue from marine services.
Motilal Oswal expects APSEZ to achieve 11% growth in cargo volumes over FY26-28, which would translate into a compound annual growth rate (CAGR) of 17%/18%/21% in revenue/EBITDA/PAT respectively over the same period. The brokerage has broadly retained its FY27 and FY28 estimates following the strong Q1 performance. Income from overseas ports increased by almost 80% owing to good performance of Australia and Colombo ports, while marine services grew considerably due to increased offshore vessels and European subsea operations. Management reaffirmed confidence in achieving 1 billion tonnes capacity by 2030, building on the current cargo handling capacity of over 650 million tonnes per year.
Despite the strong Q1 performance, the stock dropped by almost 3% following the results announcement, with the decline attributed to profit-taking given prior gains and weak sentiment toward the logistics sector. However, many prominent brokerage houses maintained positive recommendations for the stock. Nomura continued to hold its 'Buy' rating with a target price of about ₹2,080, taking into account the durability of the ports business and diversification of revenue streams. Nuvama also maintained its positive stance, hiking its target price to ₹2,000 as it forecasts better profits from abroad. The market's initial reaction surprised many investors, as excellent financial results do not necessarily lead to positive stock price movement immediately, with short-term psychology frequently driven by expectations and industry developments.
