Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AAA/Stable/Crisil A1+’ ratings on the bank facilities, non-convertible debentures (NCDs) and commercial paper programme of Adani Ports and Special Economic Zone Ltd (APSEZ). Crisil Ratings has withdrawn its rating on non-convertible debentures of Rs 1,000 crore as the same was redeemed in October 2024. The withdrawal is in line with Crisil Rating’s withdrawal policy (See Annexure 'Details of rating withdrawn' for details). Crisil Ratings has received an independent confirmation that this instrument is fully redeemed.

 

The ratings continue to reflect the strong business risk profile of the company. APSEZ is the largest integrated port operator in India and also provides allied services, with cargo handling capacity of 633 million metric tonne (MMT) as of September 2025 spread over 15 domestic and 4 international ports/terminals. Driven by regular capital expenditure (capex) and acquisitions, it had 28% market share in overall cargo and 46% in container volumes handled by Indian ports as of September 2025. Volumes and operating income saw on-year growth of 11% and 25%, respectively in the first half of fiscal 2026 and the trend is expected to continue for the full fiscal. This was supported by healthy performance in fiscal 2025 as operating income grew 14% to Rs 30,741 crore supported by – a) steady growth in port operations with volume growth of 7% on-year; b) addition of Gopalpur, Vizhinjam and Dar-es-Salaam (Tanzania) ports/terminals with combined capacity of 53 MMT, and c) expansion of logistics and marine businesses. APSEZ is scaling up its logistics and marine businesses, and revenue from the logistics business has doubled while that of the marine business has tripled in the first six months of fiscal 2026.

 

Operations are managed efficiently, as reflected in turnaround time of 0.7 days, compared with ~2 days for state-owned major ports. Consequently, operating margin was comfortable at 60% in the first half of fiscal 2026 and in fiscal 2025. However, return on capital employed (RoCE) was moderate ~15% given the capex-intensive nature of business. APSEZ benefits from its integrated logistics network, providing end-to-end logistics solutions to customers from the port to hinterland, which has led to stickiness; around 56% of the cargo is sticky in nature.

 

The ratings also reflect the healthy financial risk profile with comfortable net debt-to-EBITDA (earnings before interest, tax, depreciation and amortisation) and gearing being comfortable at 1.82 times and 0.76 times, respectively, as on September 30, 2025. Net debt-to-EBITDA will always be capped at 2.50 times. Healthy fund flow from operations of over Rs 16,000 crore in the medium term will adequately cover debt obligation, and hence, the debt protection metrics are expected to remain comfortable with interest coverage ratio above 6 times over the medium term. While most of the debt is non-amortising, refinancing risk is minimal given APSEZ’s strong financial flexibility, as demonstrated in strong fund-raising capabilities with relationships with multiple domestic and international banks as well as presence in the domestic capital market. Additionally, long concessions for ports will support refinancing. These strengths are partially offset by susceptibility to trade challenges and competition, impacting volume growth.

 

APSEZ is in process of acquiring Abbot Point Port Holdings Pte Ltd (APPH), Singapore, which owns the entities which in turn own and operate North Queensland Export Terminal (NQXT; a dedicated export terminal with a nameplate capacity of 50 MMT in Queensland, Australia, under long-term lease until 2110), from Carmichael Rail and Port Singapore Holdings Pte Ltd, Singapore (CRPSHPL; related party associated with the Adani group). The transaction, valued at A$3975 million, is expected to be completed in fiscal 2026 subject to required regulatory approvals and will be a non-cash transaction. APPH has ~US$2.2 billion of affiliate debt along with a corresponding amount of loan receivables, which will be assumed by APSEZ post-acquisition. This liability is expected to be settled within a few months post-closing of the acquisition as it also has corresponding loan receivables against this from related parties, subsidiaries and associates. However, realisation of the same within the expected timeline will be a key monitorable.

Analytical Approach

Crisil Ratings has considered the consolidated business and financial risk profiles of APSEZ and its subsidiaries, associates and joint ventures (to the extent of shareholding), as these entities are in similar line of business and are under the same management. Also, majority of the debt lies at APSEZ level and expected to be serviced through consolidated cash flows, and the debt terms are also defined at consolidated level.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Leadership position in the Indian ports and allied infrastructure

APSEZ has a portfolio of 15 domestic ports/terminals and presence at 4 international ports/terminals with total cargo handling capacity of 633 MMT as of September 2025. The company commands market share of 28% in terms of overall cargo and 46% in terms of container volumes handled by Indian ports as of September 2025. It has consolidated its position, with volumes growing at compound annual growth (CAGR) of 12% during fiscal 2017-2025 driven by regular capex towards capacity expansion as well as acquisitions. With the addition of ports such as Kattupalli, Krishnapatnam, Gangavaram, Karaikal and Gopalpur to the portfolio, it has diversified its presence across the western and eastern coasts of India. It has also expanded internationally with operations at Colombo, Sri Lanka; Dar-es-Salaam, Tanzania; and Haifa, Israel. Furthermore, APSEZ is acquiring NQXT, wherein it already does operations and maintenance (O&M).

 

Volumes and operating income grew 11% on-year and 25% on-year, respectively, in the first half of fiscal 2026 and the trend is expected to continue for the full fiscal. This follows operating income increasing 14% to Rs 30,741 crore in fiscal 2025 supported by – a) steady growth in port operations with volume growth of 7% year-on-year (y-o-y), b) addition of Gopalpur, Vizhinjam and Dar-es-Salaam (Tanzania) ports/terminals with combined capacity of 53 MMT, and c) expansion of logistics as well as marine businesses.

 

APSEZ also benefits from its wide logistics network throughout the country comprising of 127 marine vessles, 132 trains, 12 multi-modal logistics parks, grain silos with capacity of 1.3 MMT, warehousing space of 31 lakh sq. ft. and trucking fleet of 937 units as of September 2025. This enables the company to provide end-to-end solutions to its customers, leading to their stickiness (56% of the cargo is sticky). APSEZ is scaling up its logistics and marine businesses and accordingly, logistics revenue has doubled to Rs 2,224 crore while the revenue of the marine business has tripled to Rs 1,182 crore in the first half of fiscal 2026. Within logistics, APSEZ will be significantly expanding its trucking business, which will primarily provide logistics services to the group’s other businesses such as power and cement.

 

Strong operating efficiency with well diversified revenue profile

The increase in scale of operations over the years has been achieved with operating margin remaining consistently above 60%, backed by efficient port operations and allied logistics infrastructure. The efficiency of APSEZ’s port operations is reflected in turnaround time of 0.7 days compared to ~2 days for major ports in India. However, RoCE remained moderate over 12% in the past five fiscals. The operating margin was comfortable at 60.9% in fiscal 2025, as against 60.1% in fiscal 2024. Given the scaling up of non-port operations, while overall margin for APSEZ will moderate in the medium term, it will still remain comfortable around 55%; margin for port operations to remain strong at ~70%.

 

The cargo mix handled by APSEZ in fiscal 2025 was well-diversified with 33% coal, 42% containers, 6% crude and gas, and other cargo. The share of Mundra port in the total cargo has reduced consistently from 66% in fiscal 2019 to 45% in fiscal 2025 on account of acquisitions of ports on the east coast of India. Accordingly, the east coast now accounts for 40% of the total cargo. Logistics and related businesses contributed ~17% to revenue in fiscal 2025, which will increase going forward.

 

Healthy financial risk profile

APSEZ has seen improvement in leverage, as reflected in net debt to EBITDA ratio of 1.97 times as on March 31, 2025, compared to over 3 times as on March 31, 2023. Net debt-to-EBITDA stood at 1.82 times as on September 30, 2025 (gross debt of Rs 51,082 crore and cash & equivalents of Rs 13,063 crore). Debt protection metrics were comfortable, as indicated by adjusted interest coverage and net cash accrual to adjusted debt ratios of 8.09 times and 0.31 time, respectively, in fiscal 2025. Expected cash flow from operations over Rs 16,000 crore will be adequate to cover debt obligation of Rs 3,000-10,000 crore through fiscal 2028. The debt protection metrics will likely remain comfortable with interest coverage ratio above 6 times over the medium term. While most of the debt is non-amortising, refinancing risk is minimal given APSEZ’s strong financial flexibility as demonstrated in strong fund-raising capabilities with relationships with multiple domestic and international banks as well as presence in domestic capital market. It has more than 80% of debt in foreign currency with dollar denominated bonds contributing 60% of Rs 45,810 crore as on March 31, 2025 (foreign exchange risk is minimal given natural hedge with 25-30% of revenue in foreign currency as well as use of derivatives for hedging). Additionally, long concessions for ports will support refinancing.

 

The leverage was elevated in the past due to debt-funded acquisitions. Going forward, the company is expected to continue its growth momentum, but leverage is expected to be capped at net debt to EBITDA below 2.5 times. Any significant debt-funded acquisition or higher-than-expected capex impacting financial risk profile will be a key monitorable.

Key Rating Drivers - Weaknesses

Susceptibility to trade related challenges and competition impacting volume growth

While APSEZ benefits from healthy volume handling capacity and its leadership position, any disruptions on trade routes owing to geopolitical or local issues and supply chain interference can hamper volume growth of ports. Also, adverse weather conditions such as cyclones can impact port operations for several days. Nevertheless, these risks are mitigated by the operational efficiency of the company backed by robust infrastructure and lower turnaround time, and strong relationships with customers.

 

APSEZ’s port network is surrounded by major state-owned and private ports. Though APSEZ has efficient operations, ports face strong competition from adjacent major ports, which may lead to cargo diversion to competing ports or downward pressure on tariffs.

Liquidity Superior

Liquidity is supported by strong cash accrual, moderate bank limit utilisation and cash balance of Rs 13,063 crore as on September 30, 2025. Fund flow from operations over Rs 16,000 crore will remain adequate against debt repayments of Rs 3,000-10,000 crore through fiscal 2028. The capex (including acquisitions) requirements are expected in the range of Rs 12,000-18,000 crore. While most of the debt is non-amortising, refinancing risk is minimal given healthy cash accruals and APSEZ’s fund raising ability given relationships with multiple domestic and international banks as well as bond markets.

Outlook Stable

Crisil Ratings believes APSEZ will continue to benefit from its leading market position, healthy operating performance and robust port infrastructure over the medium term.

Rating sensitivity factors

Downward factors

• Higher-than-expected debt leading to deterioration in financial risk profile such that net debt-to-EBITDA above 3.0 times on a sustained basis
• Lower-than-expected growth in revenue or material decline in profitability on a sustained basis leading to weakening in business risk profile
• Any adverse outcome for pending regulatory investigation impacting financial flexibility of Adani Group, including APSEZ

About the Company

APSEZ is the largest private port operator in India with capacity of 633 MMT and handled 450 MMT cargo in fiscal 2025. APSEZ operates a portfolio of 15 domestic ports/terminals (14 operational and 1 under-development) with international presence at 4 global ports/terminals (one operational port each in Haifa, Israel and Dar es salaam port, Tanzania, 1 maintenance contract in Australia and 1 under-development port terminal in Colombo, Sri Lanka).

 

Along with port operations, it has a wide logistics network and offers port-based marine services to its owned ports/terminals as well as other ports. APSEZ has logistics presence throughout the country with 127 marine vessles, 132 trains, 12 multi-modal logistics parks, grain silos with capacity of 1.3 MMT, warehousing space of 31 lakh sq ft and trucking fleet of 937 units as of September 2025.

 

For the first half of fiscal 2026, the company reported profit after tax (PAT) of Rs 6,431 crore on operating income of Rs 18,294 crore, as against Rs 5,520 crore and Rs 14,023 crore, respectively, for the corresponding period of the previous fiscal.

Key Financial Indicators (Crisil Ratings-adjusted numbers)

Particulars	Unit	2025	2024
Revenue	Rs crore	30,741	26,978
Profit after tax (PAT)	Rs crore	11,061	8,104
PAT margin	%	36.0	30.0
Adjusted gearing	Times	0.71	0.85
Adjusted interest coverage	Times	8.09	6.28

Note: The above-mentioned financials factors in Crisil Ratings adjustments.

List of covenants

USD 10-year bond of $500 million,

Debt/ tangible networth (TNW) = <3.0x

 

For Rs 100 crore and Rs 252 crore NCDs,

FACR > 1.1, Debt/TNW<=3.0x, DSCR>=1.10x

 

For other NCDs,

FACR > 1 to 1.25x

 

For Rs 100 crore NCDs at Ocean Sparkle Ltd (OSL),

DSCR > 1.2x (subsidiary), DSCR > 1.5x (OSL consolidated)

Any other information: Not applicable