Adani Ports shares hover near record high amid Europe's Evos deal; outlook, targets

Shares of Adani Ports and Special Economic Zone Ltd climbed 2.13 per cent to hit a high of Rs 1,937.40 in Friday's trade, hovering close to their all-time high of Rs 1,949.05 touched in the previous trading session. The Adani Group firm recently announced the acquisition of Netherlands-based liquid storage operator Evos BV for an enterprise value of 2.56 billion euros ($2.88 billion).

The acquisition is expected to be completed within 15 months. Evos is Europe's second-largest independent liquid storage operator.

Adani Ports said the deal would help to scale up and diversify its liquids portfolio while providing exposure to the long-term shift towards new-age fuels such as sustainable aviation fuel and biofuels.

Brokerages largely maintained a positive stance on Adani Ports following the Evos acquisition announcement.

JM Financial said the deal valuation was largely in line with that of listed European liquids major Royal Vopak. The acquisition is valued at 11.7 times and 11.4 times CY25A and CY26E EV/EBITDA, respectively, compared with 10.2 times for Vopak on CY26E EV/EBITDA.

"In our view, the asset has limited synergies initially with Indian operations, except for potential acquisition of engineering capabilities to handle sustainable fuels. Management expects to improve RoCE levels of these assets by focusing on additional value-added activities and expanding into the broader ecosystem (distribution) over longer term," the brokerage said.

JM Financial noted that no additional capex would be required and that the acquired assets would provide annuity-type storage EBITDA through take-or-pay contracts with CPI-linked escalations, offering strong cash flow visibility.

"We view the acquisition as a largely neutral development initially, but in case Adani Ports is able to demonstrate strong EBITDA accretion from value-added services, it can be a key turnaround driver. We recently upgraded ADSEZ to a BUY with a TP of Rs 2,065," it said.

Motilal Oswal Financial Services Ltd (MOFSL) expects Adani Ports to report 14 per cent growth in cargo volumes over FY26-28. The brokerage estimates this growth to drive a compound annual growth rate (CAGR) of 17 per cent in revenue, 18 per cent in EBITDA and 21 per cent in profit after tax (PAT) over the period.

"We reiterate our BUY rating on the stock with a TP of Rs 2,170 (premised on 17x FY28E EV/EBITDA)," MOFSL said.

Elara Capital said the acquisition would expand Adani Ports' footprint from 20 to 28 ports and terminals and from five to 10 countries. The transaction would add a scaled European liquid-storage platform to its portfolio and diversify its earnings base, it added.

The brokerage maintained its estimates for Adani Ports and reiterated its 'Buy' rating, while raising its price target to Rs 2,432 from Rs 2,107.