Port volume CAGR for FY24-26 is likely to remain similar to FY2020-24 at around 5 percent, InCred Equities analysts noted in a latest report. The conservative view, they note is in-line with the growth over the FY20-24F.
But while the projects for the period have been “conservative”, the report notes that for FY2024-26F, the CAGR of private ports is expected to outpace major ports by around 234 basis points.
Growth expected in crude oil and container cargo; Coal cargo to remain flat
Over FY24-26F, Incred analysts expect to see domestic coal dispatches at 10 percent CAGR against a 7.5 percent CAGR in case of coal-based power demand. This they believe could lead to flat thermal coal imports.
On the other hand, container cargo could grow at 7 percent per annum over the same time period. This growth, they estimate could be a result of two triggers for the JNPT port – completion of phase-2 of the fourth container terminal that will raise waterfront capacity by 30 percent and a possibility of the port being connected to Indian Railways’ Dedicated Freight Corridor in FY26F.
Analysts also note that there is comfort in rising crude oil prices. Over FY2010-12 and FY2021-2023, the report explains, that despite a 63 percent and 114 percent rise in prices, crude oil imports rose by around eight percent and 18 percent. On the other hand, they noted that over FY14-16, crude oil imports rose by just seven percent, despite the decline in prices. As a result, they expect “POL cargo to rise at 3 percent CAGR (FY24-26F), vs. 1.5 percent CAGR over FY20-24F and 4.9 percent CAGR over FY22-24F.”
Incred Equities has a hold call on Adani Ports and a reduce call on JSW Infrastructure and Gujarat Pipavav Port. At close, Adani Ports was trading nearly one percent higher at Rs 1,331.80, JSW Infrastructure at one percent higher at Rs 252 while Gujurat Pipavav Port was trading nearly four percent higher at Rs 215.
