MSC-Adani deal: Vizhinjam port can generate Rs 1,410 crore EBITDA, says Axis Capital

Axis Capital expects the Vizhinjam port to emerge as a key earnings driver for Adani Ports & SEZ (APSEZ), estimating that the asset alone can generate about Rs 1,410 crore in EBITDA once the ongoing capacity expansion is completed and the terminal stabilises at optimal utilisation levels.

Axis Capital estimates that the definitive agreement signed between Mediterranean Shipping Company (MSC) and APSEZ effectively values the Vizhinjam port at around 19 times EV/EBITDA on projected earnings post the planned expansion to 5.7 million TEU by 2028.

This implied multiple compares favourably with the 15.5 times Mar-2028 EV/EBITDA that Axis currently uses to value APSEZ’s overall ports business in its sum-of-the-parts framework, signalling that the Vizhinjam asset is being priced at a premium within the portfolio.


According to Axis Capital, Vizhinjam port “could generate an estimated ~Rs14.1bn in EBITDA (assuming ~80% utilization) using similar EBITDA/TEU as in FY26” once Phase 2 expansion is completed and volumes ramp up.

The brokerage notes that adjusted EBITDA for Adani Vizhinjam Ports Private Limited (AVPPL) in FY26 stood at Rs 3.96 billion at 81% utilisation, and it extrapolates this performance to arrive at the post-expansion EBITDA potential of Rs 14.1 billion on 4.6 million TEU of handled volumes.

MSC to invest $1.4bn in two tranches
MSC, through its investing arm Terminal Investment Limited (TiL), has signed a definitive agreement to infuse $1.4 billion for a 49% stake in AVPPL, which houses the Vizhinjam asset.

Axis Capital highlights that “the deal consists of: a) Tranche 1: $539mn towards existing business of AVPPL… and b) Tranche 2 of $858mn” as 49% participation in construction debt and equity for Phase 2, which will scale up capacity from 1.6 million TEU currently to 5.7 million TEU by December 2028.

Axis Capital believes the partnership with MSC will materially de-risk the ramp-up phase of Vizhinjam by anchoring cargo flows and enhancing throughput visibility.

“The MSC deal enhances volume visibility and accelerates ramp-up at Vizhinjam,” the brokerage observes, adding that the presence of TiL as a strategic partner is expected to support the port’s transition into a major transshipment hub on key east–west trade routes.

Financial uplift from Vizhinjam in APSEZ valuation
Axis Capital estimates that the implied enterprise value of AVPPL post expansion is around $2.85 billion, with the MSC transaction unlocking an incremental equity value of about Rs 49.2 billion, or roughly Rs 21.4 per APSEZ share, relative to its existing valuation assumptions.

At the consolidated level, Axis continues to forecast robust earnings growth for APSEZ, with EBITDA projected to rise from Rs 228.5 billion in FY26 to Rs 311.9 billion by FY29, underpinned by contributions from Vizhinjam and other port assets.

Rating and target price unchanged
Despite the value accretion from the MSC transaction and the higher implied multiple for Vizhinjam, Axis Capital has maintained its “BUY” rating on APSEZ with an unchanged target price of Rs 1,970 per share, implying an upside potential of 11% from the current market price of Rs 1,776.

Also read: India's next stock market headache isn't oil but a bigger storm brewing in the skies

The brokerage continues to apply a 15.5 times Mar-2028 EV/EBITDA multiple to the ports business, arguing that the premium valuation of Vizhinjam within the portfolio underscores the strategic importance and earnings accretion potential of the asset.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)