“Our cash flow exceeds our cash flow,” said Karan Adani, managing director of the company. He said that excessive cash on hand caused the company’s leverage ratio to fall to a minimum.
Gautam Adani, founder and chairman of the Adani Group, said the company is looking for opportunities for organic and inorganic expansion, especially in Southeast Asia and East Africa.
Apsez also plans to invest ₹Chief Executive Ashwani Gupta said in fiscal 26 that capital expenditure was 11,000-12,000 million. About half of that money will go to expand capacity at its 16 existing ports. The rest will enter its logistics and marine services portfolio, operational technology and decarbonization. The company will also purchase more trucks to increase the footprint of inland logistics.
“Even the current debt levels are not very healthy for us. For the infrastructure business, EBITDA’s net debt should be at 3 points to provide our investors with the best returns. We are at 1.9, which is not a good sign,” Adani said, adding that the ratio could drop further to 1.5.
“This is something we have to work on. The team has to find high-quality assets at the right price and look for all opportunities in the market,” he said.
Bring the transfer back to India
Vizhinjam port is located near the southern tip of India, about 20 kilometers away from the East-West Transport Corridor, and is intended to become a transshipment hub. Large container ships, called mother ships, can get off and pick up cargo at transshipment hubs when traveling between major ports. In layman's terms, this is equivalent to Dubai being a hub for international air travel.
According to the company's statistics, about three-quarters of Indian goods transshipment occur in overseas ports such as Colombo, Singapore and Dubai. This is because most Indian ports are far from the main international transport route or are not enough to handle large mother ships.
“Give us a year and you will find that all Indian goods will be forwarded here, not internationally, internationally,” Karan Adani said. “The ultimate goal is to help reduce the shipping costs for Indian exporters and importers.”
Adani said the port of Vizhinjam began commercial operations in December and has exceeded its ability to process 1 million twenty equivalent units (TEUs) each year.
With Apsez Invests, the port will reach 5 million TEU capacity by 2028 ₹He said that in the second phase, an expanded berth and a breakwater will be included, including an expanded berth.
To be sure, Vizhinjam's cargo handling costs will not be cheaper than its overseas competitors. But it is close to other Indian ports and using the latest technology will help reduce turnover time, thus saving costs.
Growth Opportunities
According to Thursday's earnings report, fiscal 25 is a good year for Apsez. It released record profits ₹110.61 crore, while also completing the acquisition of Gopalpur port in Odisha and commenced operations in Vizhinjam and Colombo.
It handled 450 million tons of cargo ₹310.79 million. The company sets a target of handling 1 billion tons of cargo annually by 2030, of which 150 million tons will come from its overseas ports in Israel, Tanzania, Tanzania, Sri Lanka and Australia.
The company's cash balance is ₹As of March 31, 89.91 million. For FY25, the Apsez Board of Directors recommends dividends ₹7 per share, converted to ₹150 billion.
Adani said Apsez is planning to bid for the upcoming Vadhavan port during bidding.
Other growth opportunities include the planned Central European Economic Corridor of India (IMEC). Given its control of the terminal in Colombo, a port in Tanzania and the port of Haifa in Israel, Apsez will be obtained from the route. All of this falls on the planned trade route that promises to be a replacement for the Suez Canal and is a counterattack against China’s belt and road initiatives.
The company's board of directors approved the buyback of the NQXT port terminal from the Adani family last month and sold it to them in 2013 to ease debt. Gupta said the company is focusing on green hydrogen export opportunities.
Apsez shares closed at 4.1% on BSE on Friday ₹1,267.05. Benchmark Sensex ended the meeting 0.3% in green.
Key Points
- The cash generated by the Adani port exceeds its ability to deploy effectively, resulting in a low leverage ratio.
- The company is seeking organic and inorganic growth opportunities, especially in Southeast Asia and East Africa.
- The newly established Vizhinjam Transport Port aims to reduce dependence on overseas hubs such as Colombo and Singapore.
- Apsez plans to invest ₹11,000-12,000 million in fiscal 26 will focus on port capacity expansion, logistics and decarbonization efforts.
- The company aims to process 1 billion tons of cargo annually by 2030, including 150 million tons from international ports.
