Adani Ports, JSW Infra: Emkay initiates coverage, suggests 9-25% upside on 2 stocks

Emkay Global on Monday initiated coverage on the Indian ports sector, saying the industry is entering a structurally strong decade backed by accelerating capacity additions, rapid privatisation and a regulatory push to strengthen multimodal connectivity. The brokerage said it prefers large private incumbents with scalable platforms and integrated logistics offerings, and initiated coverage with a 'Buy' on Adani Ports and Special Economic Zone Ltd (APSEZ) and an 'Add' on JSW Infrastructure Ltd.

Emkay Global set a target price of Rs 1,900 on Adani Ports, implying an upside of about 25 per cent. It suggested a target price of Rs 300 on JSW Infrastructure, indicating a potential upside of around 9 per cent from the prevailing levels.

The brokerage said ports handled about 95 per cent of India’s EXIM trade by volume and remained central to the country’s ambition of becoming a $10 trillion economy. It noted that the government aimed to double container capacity by CY30 and expand overall cargo-handling capacity to about 10,000 million tonnes per annum by CY47, from roughly 2,700 million tonnes per annum currently.

Emkay Global said the sector was at an inflection point due to faster privatization, regulatory reforms positioning India as a transshipment hub, and improving multimodal connectivity aimed at lowering logistics costs and improving global competitiveness. It added that the government’s push to raise private participation at major ports, with a target of 85 per cent of cargo handled by CY30, should help improve efficiencies and reduce turnaround times. The success of the Vizhinjam port was cited as a proof of concept for future private investments in maritime infrastructure.

According to the brokerage, established private port operators were leveraging regulatory support and strong cash flows to scale up capacity while expanding across the logistics value chain, including rail connectivity, multimodal logistics parks, warehousing and CFS/ICD networks. This, it said, helped deepen customer relationships, improve wallet share and support profitability, while predictable cash flows and manageable leverage could support valuation re-rating over the medium term.

On Adani Ports, Emkay Global said the market leader was expected to evolve into an integrated logistics platform, which should structurally reduce earnings cyclicality linked to trade volumes. The brokerage added that brownfield expansions and the ramp-up of global ports were likely to sustain growth without compromising profitability.

For JSW Infrastructure, Emkay Global said the expansion of group businesses provided strong support for rapid capacity addition and reduced execution risks, factors that were already reflected in its current valuation.

The brokerage flagged risks including a slowdown in global trade due to regulatory or geopolitical uncertainties, delays in capacity additions and rising competitive intensity in the logistics segment.