Adani Ports' Logistics Business Set To Drive Cargo Growth In The Coming Years

New Delhi, Feb 5 (KNN) In a strategic move, Adani Ports and Special Economic Zone (APSEZ) is gearing up to elevate its logistics business, foreseeing substantial cargo growth over the next 3-4 years.

The company is intensifying efforts to expand warehousing capacity, rakes, industrial parks, and agri silos.

As of the third quarter of FY24, the logistics segment accounted for approximately 8 per cent of APSEZ's total revenue and around 3 per cent of its EBITDA.

During an earnings call to discuss the company's results, Managing Director Karan Adani highlighted the growth phase of the logistics business without disclosing specific investment figures for the segment.

The overall expected capital expenditure (capex) for the year ranges between Rs 7,000-Rs 7,500 crore, with Rs 5,500 crore already spent.

By FY28, the logistics segment aims to triple its rake capacity to over 300, catering to both bulk and container cargo.

Two multimodal logistics parks, near Mumbai and in the north, are set to be commissioned in the next 3-4 years, adding to the existing 11 logistics parks, which are projected to increase to 15 in the next two years.

The logistics business, growing faster than the ports business on a lower base, has witnessed a 45 per cent increase in EBITDA over the last five years, compared to the ports' 20 per cent rise.

The return on capital employed in the logistics segment is anticipated to double to 12-13 per cent over the next three years.

In the first nine months of FY24, Adani Logistics reported impressive financials, with revenue surging over a fourth to Rs 1,519 crore, EBITDA rising around 23 per cent, and a commendable margin of approximately 29 per cent.

The logistics arm handled rail cargo volumes of 437,081 TEUs, marking a 22 per cent YoY increase.

Analysts foresee the logistics business having the potential to achieve a remarkable 30 per cent annual growth over the next 3-4 years, leveraging its capability to provide end-to-end solutions with the ports at the centre of its operations.

(KNN Bureau)