MSC-Adani Deal Positions Vizhinjam Port to Achieve Rs 1,410 Crore EBITDA, According to Axis Capital

Axis Capital’s recent analysis highlights the significant earnings potential of the Vizhinjam port for Adani Ports & SEZ (APSEZ). The firm projects that the port will achieve an EBITDA of approximately Rs 1,410 crore upon completion of its ongoing capacity expansion and stabilisation at optimal utilisation levels. This asset’s valuation is further underscored by a definitive agreement with Mediterranean Shipping Company (MSC), which positions the Vizhinjam port at a compelling valuation of 19 times EV/EBITDA against a projected earnings backdrop after expansion reaches 5.7 million TEU by 2028. Notably, this multiple exceeds the 15.5 times Mar-2028 EV/EBITDA that Axis currently applies in its sum-of-the-parts valuation of APSEZ, indicating a premium pricing for this strategically critical asset.

Axis Capital estimates that Vizhinjam could generate approximately Rs 14.1 billion in EBITDA, presuming around 80% utilisation. This outlook is grounded in the port’s operational performance, where earlier adjusted EBITDA for Adani Vizhinjam Ports Private Limited (AVPPL) in FY26 was recorded at Rs 3.96 billion at 81% utilisation. By extrapolating this performance post-expansion, Axis suggests a promising growth trajectory for Vizhinjam’s handling volumes, thus enhancing the overall earnings outlook for APSEZ.

The agreement with MSC involves a sizeable investment of $1.4 billion in two tranches, aimed at securing both the existing operations and the expansion of Vizhinjam. This strategic partnership is anticipated to mitigate risks associated with the ramp-up phase by anchoring cargo flows and improving throughput visibility, thereby bolstering Vizhinjam’s potential as a key transshipment hub along vital east-west trade routes. The incremental equity value unlocked through the MSC transaction is estimated to amount to approximately Rs 49.2 billion, equating to about Rs 21.4 per APSEZ share, further enhancing the overall valuation.

Despite these advancements and the potential value enhancement from the MSC deal, Axis Capital maintains its “BUY” rating on APSEZ with an unchanged target price of Rs 1,970 per share, reflecting an 11% upside from the current price of Rs 1,776. The consistent application of the 15.5 times Mar-2028 EV/EBITDA multiple underscores the firm’s confidence in the strategic importance and long-term earnings accretion potential of the Vizhinjam asset within APSEZ’s broader portfolio.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)