India’s port sector is sailing through a reasonable momentum, with key players making some waves in the stock market. Port stocks saw a significant movement in today’s trading session. Adani Ports & Special Economic Zone (APSEZ) surged nearly 3% intraday, while JSW Infrastructure rallied over 7%. Other stocks in the sector also gained, including Cochin Shipyard up 1.34%, Gujarat Pipavav Port with a marginal increase of nearly 1% and AFCONS jumped 4% Philip Capital has initiated coverage on India’s port sector, citing multiple structural and policy-driven tailwinds.
4 reasons why Philip Capital is betting big on ports
The brokerage firm outlines four key reasons for its bullish outlook:
1. Ports are evolving into industrial hubs
The brokerage firm, Philip Capital in its report notes that Indian ports are no longer just transit points for cargo; they are transforming into industrial hubs. The development of Special Economic Zones (SEZs), Free Trade Warehousing Zones (FTWZs), and industrial parks around ports is boosting export competitiveness and reducing last-mile logistics costs.
2. Strong cargo growth and expanding capacity
According to the brokerage, cargo handled at Indian ports has grown at a 4.7% CAGR, reaching 1.54 billion tonnes from FY14 to FY24. While the sector faced a temporary slowdown during the pandemic, it has rebounded strongly, driven by increased coal, iron ore, and container volumes.
Going forward, the brokerage expects container cargo to grow at 9% to 10% CAGR, while dry and liquid bulk cargo is projected to grow at 6% CAGR. In addition, demand for new energy fuels like LNG, ammonia, and hydrogen is expected to increase, creating new opportunities for port operators.
ALSO READVedanta rallies 4%: 5 things every investor needs to know at this hour 3. Government push for lower logistics costs and policy support
The Indian government is committed to lowering logistics costs as a percentage of GDP from 14% to 9%, making the country’s supply chain more competitive. Several flagship initiatives are driving this change:
Sagarmala Project – Aims for port led development to boost efficiency.
Bharatmala Project – Focuses on improving road connectivity to ports.
Dedicated Freight Corridor (DFC) – Enhancing railway connectivity to ports.
Harit Sagar Guidelines – Introduced in May 2023 to promote green and sustainable maritime operations.
» Read More
