Elara Capital expects strong Q3 for Ports & Logistics cos; check top picks

Elara Capital has given a Buy rating to its top ports and logistics picks, including Adani Ports & SEZ, JSW Infrastructure and Delhivery

Port operators are expected to continue outperforming surface transporters in the December 2025 quarter (Q3FY26), driven by strong container cargo volumes, a recovery in iron ore shipments, ramp-up at international ports, additions to marine fleets and consolidation of logistics operations, according to analysts at Elara Capital.

 

On the contrary, surface logistics demand is likely to remain steady, led by the business-to-consumer (B2C) segment, supported by festive season demand and GST rate cuts. Rail-based EXIM volumes are also expected to see further improvement on the back of healthy export-import activity.

 

Elara Capital has given a Buy rating to its top ports and logistics picks, including Adani Ports & SEZ with a target price of ₹1,700, JSW Infrastructure at ₹362, and Delhivery at ₹593.

 

Volume growth to support revenue, margins to remain mixed

The brokerage expects Adani Ports & SEZ (APSEZ) to post 17 per cent year-on-year (Y-o-Y) revenue growth in Q3FY26, driven by around 10 per cent growth in cargo volumes to nearly 123 million tonnes. Growth is likely to be driven by the ramp-up of international ports in Sri Lanka and Tanzania, expansion in the marine segment following vessel additions, and higher contribution from logistics, particularly trucking and freight forwarding.

 

Analysts estimate consolidated revenue to come at about ₹92 billion for the quarter, with Ebitda margins expected to remain stable at around 60.3 per cent. While a higher share of marine and logistics revenues may weigh on the mix, this is likely to be offset by scale benefits and operational efficiencies at the port business, Elara Capital noted.

 

JSW Infrastructure is expected to report around 7 per cent volume growth, supported by steady captive volumes as maintenance-related disruptions ease and a recovery in iron ore handling at Paradip, with about 1 million tonnes handled in December. The improvement is being supported by strong global prices and the addition of new customers.

 

However, higher volumes from third-party terminals could hurt port margins in the near term, even as tariff normalisation and improving profitability in the logistics segment provide some support. Elara Capital noted that capex plans for JSW Infrastructure remain on track.

Strong B2C volumes to drive profits for Delhivery

According to the brokerage, Delhivery is expected to witness strong volume-led growth in Q3FY26, with express parcel volumes projected to rise 30 per cent and part truck load volumes to increase 19 per cent, driven by strong e-commerce demand and a boost from GST rate cuts.

 

Ecom Express-related integration costs are likely to be lower at around ₹0.8 billion, easing one-off pressures. However, elevated corporate costs, including those linked to labour code provisions, could partly offset operating leverage. Revenue from the supply chain services segment may remain muted as the company prefers profitability over growth.

 

With no major network expansion planned, the quarter is expected to reflect a disciplined, margin-focused operating approach rather than capacity addition, Elara Capital noted.

Mixed trends across B2B, B2C, and 3PL players

In Q3FY26, logistics companies are expected to report divergent operating trends, reflecting the mix of B2B, B2C, and 3PL dynamics. VRL Logistics is likely to witness a 6 per cent Y-o-Y fall in volumes due to muted demand, though margins are expected to remain healthy at around 18 per cent, supported by cost controls and price hikes.

 

Blue Dart Express is expected to report steady express volumes, driven by strong premium B2B and B2C demand, with margins benefiting from network efficiency and service mix. Mahindra Logistics should see improvements in B2B express volumes and narrowing losses, aided by space additions, price hikes, and operating leverage in its 3PL business. 

 

Meanwhile, Container Corporation of India is likely to report flat Y-o-Y realisations, reflecting increased competition and domestic bottlenecks, despite gradual efficiency gains from Dedicated Freight Corridor-linked operations. Overall, the quarter is likely to highlight a contrast between volume-driven growth in select B2C players and margin resilience in cost-focused operators, the brokerage said in its note.  Disclaimer: The views or investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.