APSEZ's marketshare gain is sustainable: Goldman Sachs
Jun 30, 2021
New Delhi [India], June 30 : Goldman Sachs has expressed strong confidence in the near and medium-term performance of Adani Ports and Special Economic Zone (APSEZ) and termed its target of handling 550 million tonnes by 2025 as achievable.
After reviewing the company's FY21 annual report, Goldman Sachs said it continues to be encouraged by its key strengths -- an integrated portfolio of ports infrastructure and services across India, adequate capacity to leverage growth opportunities and a high level of operational efficiency.
"Coupled with these, as APSEZ focuses on becoming one-point-customer centric transport utility, we believe growth will remain strong in the near to medium term."
Goldman Sachs report commented positively on all performance parameters of the country's largest private ports company. "FY25 targets which they call as Mission 2025 seem achievable. They have revised upwards their port cargo throughput target by 25 per cent to 500 million tonnes by 2025."
It acknowledged that the APSEZs growth has been faster than all-India port sector growth and its market share gain is sustainable.
"The company's various joint ventures have started to generate profits and we have seen improvement in performance broadly across JVs," the report said. APSEZ represents a large network of ports with India's largest SEZ at Mundra.
The company's port business is integral to its logistics business. It is India's largest private port operator with presence across 12 locations with the capacity of 400 million tonnes annually.
In 2021, APSEZ undertook the successful acquisition of three ports -- Krishnapatnam Port, Gangavaram Port and Dighi Port -- to improve its east and west coast parity. It also aims to expand the footprint in the warehousing and logistics sector by signing strategic partnerships with major players.
Goldman Sachs highlighted improvement in the company's average debt maturity and reduction in cost of debt. It also captured the expected growth from ancillary logistics business to provide synergy to the existing ports.
