Adani Ports: Profits Surge Amid Early Warnings of a 2027 Slowdown

Adani Ports and Special Economic Zone (APSEZ)

Global trade flows are currently heavily impacted by the US-Iran conflict that erupted in late February, leading to the blockade of the Strait of Hormuz — a critical waterway for the world's oil trade. Although Asian ports are assessed to be less directly exposed to the conflict's risks compared to Gulf region ports, shipping disruptions still threaten to weigh on the profit margins of global port operators.

Financial Picture: The M&A Footprint and the Challenge of Surpassing a Record Base

Looking back at fiscal year 2026 (ending in March 2026 according to the Indian financial year), APSEZ's core profit increased by 20% to $2.41 billion, while revenue rose 25% to $4.08 billion. A 13% surge in cargo volumes was also a key factor helping the company exceed its targets for the fiscal year.

However, heading into fiscal year 2027, Adani Ports projects its core profit growth will only reach between 9% and 14%, a significant deceleration compared to the 20% achieved in 2026. Revenue is also expected to record a growth rate of only 11% to 16%.

Explaining the impressive growth in 2026 and the outlook for the following year, Deven Choksey, Managing Director at DRChoksey FinServ, stated: "Adani Ports' fiscal 2026 volume and revenue growth was boosted by the acquisition of the NQXT terminal, which added about 35 million tonnes or roughly eight per cent to volumes and inflated growth to around 25 per cent."

The conglomerate completed the acquisition of the North Queensland Export Terminal (NQXT) — a deep-water coal export terminal in Australia—in December 2025. According to Choksey, stepping into the next fiscal year, the growth momentum is expected to gradually plateau and stabilize, as the previous year's revenue has already established an exceptionally high base. Additionally, the remaining room for contribution from the NQXT terminal is limited, and export activities have been temporarily disrupted by the war, even though domestic demand continues to show reliable recovery.

Returning to Capital Expenditure Discipline

Currently, Adani Ports operates a network of 19 seaports spanning four countries. In fiscal year 2026, the conglomerate's capital expenditures rose to $2.41 billion, exceeding projected estimates. However, this figure is expected to be adjusted downward to between $1.26 billion and $1.48 billion in 2027, sending a strong signal of tightening spending discipline.

Regarding the direction of cash flow allocation, Ashwani Gupta, CEO of Adani Ports, affirmed: "Disciplined capital allocation will ensure that future capital expenditure needs are funded via internal accruals, while preserving flexibility for selective inorganic growth."

Despite macroeconomic challenges, the stock market maintains a positive outlook on the port operator's shares. Adani Ports' stock closed 0.9% higher on Thursday, recovering after an initial 3.9% drop to 1,596.80 INR early in the session. Year-to-date, the stock has gained about 13%, outperforming the benchmark Nifty 50 index, which is currently recording a decline of approximately 8%.

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Source: Phaata.com (According to Baird Maritime)

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