Adani Ports and Special Economic Zone (APSEZ) anticipates significant cargo growth over the next 3-4 years, with its logistics business poised to match and drive the expansion, fueled by strategic investments.
Adani Ports and Special Economic Zone (APSEZ) expects substantial cargo growth in the next 3-4 years, with its logistics sector set to drive expansion through strategic investments. The company is intensifying efforts to augment warehousing capacity, rakes, industrial parks, and agricultural silos.
In the third quarter of FY24, the logistics segment accounted for approximately 8 percent of Adani Ports’ total revenue and 3 percent of its EBITDA. Managing Director Karan Adani, in an earnings call, emphasised the growth phase of the logistics business without specifying investment figures. The overall expected capital expenditure for the year is estimated between ₹7,000-₹7,500 crore, with ₹5,500 crore already spent.
By FY28, Adani Ports aims to triple the rake capacity in the logistics segment to over 300, serving both bulk and container cargo. Two multimodal logistics parks near Mumbai and in the north are slated for commissioning over the next 3-4 years, augmenting the current 11 logistics parks, expected to increase to 15 in the next two years. The warehousing capacity, presently at 2.4 million square feet, targets surpassing 60 million square feet, constituting 15 percent of the total market capacity, with a pan-India presence.
Despite a lower base, the logistics business has outpaced the ports business, witnessing a 45 percent increase in EBITDA over the last five years compared to the port’s 20 percent. Analysts project the logistics business’s potential annual growth at 30 percent over the next 3-4 years, offering comprehensive end-to-end solutions with ports at the core.
In the first nine months of FY24, Adani Logistics reported revenue growth of over a quarter to ₹1,519 crore, a 23 percent increase in EBITDA, and a margin of approximately 29 percent. Handling rail cargo volumes of 437,081 TEUs, a 22 percent YoY increase, the logistics business continues to demonstrate robust performance.