Company Overview
Adani Ports and Special Economic Zone Limited (APSEZ) is the largest port developer and operator in India, with a total operating capacity of 627 MMTPA (million metric tonnes per annum) (including under construction terminals and ports and Gopalpur Port). The company is promoted by the Adani Group and is operating from seven maritime states of India namely Gujarat, Maharashtra, Goa, Tamil Nadu, Andhra Pradesh, Puducherry, and Odisha. APSEZs domestic ports/terminals account for approximately one-fourth of the countrys total port capacity, and the Company manages large volumes of cargo from both coast areas and the hinterland. The Company is also developing a container transshipment port at Vizhinjam in Kerala and has forayed in the state of West Bengal with the initiation of the implementation of designing, building, financing, operating and maintaining the bulk mechanised terminal (Berth #2) at Haldia Dock Complex, Haldia. APSEZ?s operating ports/terminals capacity is divided between the west and east coasts of India, with broadly 60% of its capacity located on the west coast and 40% on the east coast.
The Company is also slowly establishing its global presence and is currently present in four international geographies – Australia, Israel, Tanzania and Sri Lanka. APSEZ owns the Haifa Port in Israel while has an O&M contract for Abbot Point Bulk Coal Terminal in Australia and Container Terminal 2 at the Dar es Salaam Port in Tanzania. The Company is also developing a trans-shipment container terminal at Colombo Port in Sri Lanka.
APSEZ has set an ambitious goal to become Worlds leading integrated transport utility company and the worlds largest private port company by 2030. APSEZ is dedicated to achieving carbon neutrality by 2025, demonstrating its commitment to reducing emissions and controlling global warming to 1.5?C above pre-industrial levels. The Company aims to become carbon-positive by 2030, further validating its commitment to sustainability and reducing its impact on the environment.
Highlights of FY 2023-24
Ports
The Dhamra LNG Terminal commenced commercial operations during the year. The first LNG vessel was berthed safely at LNG Terminal on April 1, 2023 and completed her unloading operation (cargo qty 51,196.756 MT) on April 14, 2023.
Mundra led from the front in promoting sustainability in maritime trade and issued a trade circular for the exemption of vessels utilising liquefied natural gas (LNG) as fuel. This scheme is a significant step towards reducing carbon emissions in the maritime industry.
APSEZ clocked its highest ever monthly cargo of 38.12 MMT in March 2024. In addition, the flagship Mundra Port surpassed the milestone of successfully handling 17 MMT cargo in a single month.
This historic milestone marks the first instance in
Indian maritime history where a port has handled such a substantial volume of cargo in a month.
Mundra Port completed 25 years of operations in 2023.
APSEZ successfully completed the integration of Haifa & Karaikal Ports in its folds in the period of FY 2023-24.
Vizhinjam Port berthed its first vessel (carrying project equipment) in October 2023.
APSEZ announced a second strategic partnership with Terminal Investment Limited (TiL), the container terminal operating and investing arm of MSC, the largest container shipping line in the world, for the operation of Adani Ennore Container Terminal Pvt Ltd (AECTPL). Terminal Investment Ltd, through its fully owned subsidiary Mundi Ltd, will acquire a 49% shareholding of AECTPL from APSEZ for a consideration of Rs 247 crore.
Future-Ready Infrastructure: APSEZ ports continue to transcend the operational excellence benchmarks of the ports sector in India. In continuation of the same phenomenon, in 2023, Mundra Port berthed one of the longest vessel ever, MV MSC Hamburg, (399 meters long and 54 meters wide vessel) with a carrying capacity of 15,908 TEUs & in the same period, Krishnapatnam berthed its largest vessel measuring 335.94 m LOA and 42.94 m beam
Several ports in the APSEZ ports portfolio, viz., Mundra Port, Tuna Terminal, Hazira Port, Mormugao Terminal, Karaikal Port, Ennore Terminal, Kattupalli Port, Krishnapatnam Port, Gangavaram Port & Dhamra Port achieved their highest ever annual cargo handling in the period FY 2023-24 thereby demonstrating the readiness of APSEZ to serve the maritime trade.
APSEZ entered into a definitive agreement to purchase 95% stake in the Gopalpur Port situated in the Ganjam District of Odisha to further attain the east coast to west coast geographical diversification and to have access to the mining hubs of Odisha region.
Logistics
Total count of logistics park reached 12 with addition of 3 MMLPs (Virochannagar, Loni, Valvada)
Successfully inducted 34 rakes in this financial year taking our overall rake count to 127
ALL added ~0.8 million sq. ft. of warehousing capacity after addition of WHs in Indore & Mumbai (Kalyan). This takes the overall capacity to ~2.4 million sq. ft.
Successfully demonstrated road to rail conversion in the Mundra Maliya cluster, and transported around 30k TEUs by rail.
Total agri silo capacity increased to 1.2 MMT with addition of 2 agri silos (Samastipur and Darbhanga)
Initiated construction activities on locations identified for setting up agro silos granted through competitive bidding.
Launched trucking business segment during the year with 900 trucks to provide last-mile connectivity to the customers from ports/ICDs/customer premises
SEZ, BD & Industrial Zones (IZ)
Mundra SEZ is the largest multi-sector SEZ in India. Excellent multimodal connectivity makes SEZ an attractive investment destination for setting up export focused industries. Cluster-based development approach has been adopted for industries in textiles, chemicals, engineering, etc. sectors. With investment exceeding Rs 70,000 crore and employment in excess of 34,000 (direct & indirect), Mundra SEZ is working ceaselessly to attract even more investments for manufacturing.
Maritime clusters are planned across various Ports of APSEZ for ensuring captive cargoes. Allotment of land at various ports are being sought to develop industrial areas for ensuring Industry led Port Growth in port cargo.
Construction of storage tanks for crude oil by IOCL is at an advanced stage of implementation. This will ensure an additional 10 MMTPA crude oil tonnage to Mundra Port.
Major works related to Natural Gas distribution network in Mundra SEZ have been completed in current FY and the pipeline connectivity for the natural gas supply to Mundra Industrial Area is expected to go live by next year.
Ready to Use Facilities including CFS / warehouse in Mundra SEZ have been planned for SEZ as well as DTA entities, who desire to take on rent such developed infrastructure facilities on a long-term basis.
Construction of storage tanks for crude oil by HRRL is at an advanced stage of implementation. This will ensure an additional 8 MMTPA crude oil tonnage to Mundra Port.
Global Economic Overview
The global economy displayed remarkable resilience in 2023; however, the pace of growth remains slow. According to the International Monetary Fund (IMF), global growth maintained stability, holding at a modest rate of 3.2%, compared to 3.5% in 2022. However, underlying risks and vulnerabilities persist due to escalating geopolitical conflicts, sluggish recovery in China, volatility in energy and food markets, prolonged higher interest rates and inflation. Furthermore, the Red Sea crisis has caused the biggest diversion of global trade in decades, leading to delays and heightened expenses for shipping lines that are avoiding a waterway that normally handles 12% of the worlds maritime trade. As the crisis continues to unfold, its far-reaching impact on global supply chains has become increasingly evident in terms of heightened costs for the Shipping Lines and excess costs for the shippers owing to levy of war premiums in addition to schedule disruptions. Despite these challenges, indications of stable growth, strong performance of the United States and several large emerging market and developing economies, along with inflation returning to target levels in advanced economies, indicate a diminished risk of a severe economic downturn.
Global inflation continues to recede at a faster pace from 8.7% in 2022 to 6.8% in 2023. Despite headline inflation experiencing a decline from its unprecedented peaks, core inflation has remained persistent and is expected to decline gradually.
Prices increased in April due to falling global oil inventories. Geopolitical tensions also supported crude oil prices amid conflict between Iran and Israel, which added uncertainty to already heightened tensions in the Middle East. Despite these tensions, crude oil price volatility has been subdued for much of this year by significant spare crude oil production capacity.
Despite the major economic shocks, global trade has been resilient in recent years. Merchandise trade experienced a decline of 1.2% in 2023 as import demand in real terms fell sharply in Europe, declined in North America and remained flat in Asia. However, imports surged in the Middle East and the Commonwealth of Independent States (CIS) region.
Region-wise growth (%)
| Global Economy | 3.2 | 3.2 | 3.2 |
| Advanced | 1.6 | 1.7 | 1.8 |
| Economies (AEs) | |||
Emerging Markets and Developing |
4.3 | 4.2 | 4.2 |
| Economies (EMDEs) |
(E - Estimates, P - Projections) (Source: International Monetary Fund)
Performance of major economies
United States: The US economy expanded more quickly than expected. Its GDP increased from 1.9% in 2022 to 2.5% in 2023. The US has witnessed the strongest recovery among major economies, marked by a stronger performance in private consumption, swift containment of a looming banking crisis, a tight labour market, and rising wages.
China: China?s GDP grew from 3.0% in 2022 to 5.2% in 2023. The shakier economic growth recovery of China in 2023 is attributed to depression in the real estate market and tepid demand. China?s central banks announced cutting the reserve requirement ratio (RRR) for all banks by 50 basis points (bps) as part of a slew of measures to support the fragile economy.
United Kingdom: The GDP in the UK contracted from 4.3% in 2022 to 0.1% in 2023. The decline in growth reflects tighter monetary policies to curb still-high inflation and lingering impacts of the terms-of-trade shock from high energy prices.
Japan: Economic growth in Japan increased to 1.9% in 2023 from 1.0% in 2022, bolstered by pent-up demand, a surge in inbound tourism, accommodative policies and a rebound in auto exports that had earlier been held back by supply chain issues.
Germany: The GDP in Germany shrank by 0.3% in 2023 from 1.8% in 2022, due to the impact of high energy prices, weaker industrial demand and higher interest rates.
(Source: IMF Economic Outlook, April 2024; World Trade Organisation; Economic Times)
Outlook
The global economy is expected to maintain its resilience in 2024, with the IMF projecting global growth of 3.2% for both 2024 and 2025. Concurrently, global headline inflation is forecasted to decrease to 5.9% in 2024 and 4.5% in 2025. With the improvement in the economic landscape, the World Trade Organisation predicts a moderate recovery in global merchandise trade volume, with growth rates expected to reach 2.6% in 2024 and further increase to 3.3% in 2025.
The global economic outlook in 2024 will be impacted by elevated interest rates as the war against inflation is not over and continues to be threatened by multiple factors including persistent core inflation, withdrawal of fiscal support amid high debt weighing on economic activity, low underlying productivity growth, a tight job market and economic uncertainties. Furthermore, the prolonged Russia-Ukraine conflict has the potential to further dampen the overall economic outlook of the European Union. Additionally, an escalation in geopolitical tensions in West Asia could raise energy and commodity prices, reduce energy supply, increase the risks of supply disruptions, and pose downside risks for the disinflationary trend and the overall global economy. However, positive factors, such as faster disinflation, stronger-than-expected economic performance of the US and several large emerging market and developing economies, economic stimulus in China, the resilience of Europe amid the ongoing war, and easing of supply chain bottlenecks will bolster the outlook of the global economy.
(Source: IMF Economic Outlook, April 2024; World Trade Organisation)
Indian Economic Overview
Amid a challenging global economic landscape and deteriorating geopolitical conditions, India has been a bright spot. It is the fifth-largest economy in the world and is poised to retain its position as the worlds fastest-growing major economy. Its GDP growth remained robust at 7.6% in FY 2023-24 as against 7% in FY 2022-23, supported by strong domestic demand, moderate inflation, a stable interest rate environment, and strong foreign exchange reserves. Furthermore, an accelerated pace of economic reforms and increased capital expenditure facilitated construction activities and created extensive employment opportunities across the country. The International Monetary Fund (IMF) praised India?s economic resilience, impressive growth, and significant advancements in formalisation and digital infrastructure.
Growth of the Indian Economy
| FY 2021-22 | FY 2022-23 | FY 2023-24 (E) | |
Real GDP growth (%) |
9.1 | 7.0 | 7.6 |
(E - Estimates)
(Source: Ministry of Statistics & Programme Implementation)
As per the Second Advance Estimates of National Income, FY 2023-24, a double-digit growth rate of 10.7% in the Construction sector and an 8.5% growth rate in the Manufacturing sector have contributed to the GDP growth in FY 2023-24. Moreover, India?s IIP growth during FY 2023-24 stood at 5.86%, up from 5.3% in the corresponding period in the previous year. The Electricity sector recorded a growth of 7.05%. The Mining and Manufacturing sectors also recorded a higher growth of 7.5% and 5.4% respectively during the same period. The growth in gross value added (GVA) at Basic (2011-12) Prices is pegged at 6.9% in FY 2023-24 as against 6.7% in FY 2022-23. The Real Gross Domestic Product (GDP) or GDP at Constant (2011-12) Prices for FY 2023-24 is estimated to reach Rs 172.90 lakhs crore, compared to the First Revised Estimates (FRE) of GDP of Rs 160.06 lakhs crore in FY 2022-23. Despite a subdued external environment, India?s overall trade deficit is estimated
35.77% from USD 121.62 billion in FY 2022-23 to USD 78.12 billion in FY 2023-24. Merchandise trade deficit by 9.33% at USD 240.17 billion compared to USD 264.90 billion in the previous fiscal year. Total merchandise exports declined by 3.10% to USD 437.06 billion in FY 2023-24 compared to USD 451.07 billion in FY 2022-23. Electronic Goods, Drugs & Pharmaceuticals, Engineering Goods, Iron Ore, Cotton Yarn/Fabric/made-ups, Handloom products, etc., and Ceramic products & glassware were major contributors to export growth. Merchandise imports contracted by 5.40% to USD 677.24 billion compared to USD 715.97 billion in FY 2022-23.
A positive trend is observed in CPI inflation, which has been on a downward trajectory and eased to 4.85% in March 2024. According to the Reserve Bank of India (RBI), CPI inflation is estimated at 5.4% for FY 2023-24. The RBI, in its efforts to control inflation and boost economic growth, maintains the policy repo rate at 6.50% and remains vigilant and prepared to implement effective measures to achieve the target of 4% inflation. The structural interventions implemented by the government will continue to contribute to the growth of Indias economy. ‘Make in India? has made significant achievements and is now focusing on 27 sectors under ‘Make in India 2.0? to make India a manufacturing hub. India has reported meteoric improvement in Ease of Doing Business and ranked 63rd among 190 countries. As part of the Reducing Compliance Burden exercise, more than 41,000 compliances have been reduced to promote Ease of Doing Business and increase competitiveness.
(Source: Ministry of Statistics & Programme Implementation; Ministry of Finance; RBI; Ministry of Commerce & Industry)
Interim Budget FY 2024-25
The Interim Budget 2024-25 reflects the governments continued focus on inclusive development, economic stability, environmental sector-specific sustainability and strategic global positioning. The budget lays the foundation for the vision of a Viksit Bharat (Developed India) by 2047 and outlines a multi-pronged economic management strategy, including infrastructure development, digital public infrastructure, taxation reforms and proactive inflation management. The government has raised the capital expenditure outlay by 11.1% to Rs 11.1 lakhs crore for FY 2024-25, which would be 3.4% of the GDP. Additionally, the outlay for the Production Linked Incentive (PLI) scheme has been increased by 33.5% to Rs 6,200 crore.
The allocation for the Ministry of Road Transport and Highways (MoRTH) increased by 2.8% to Rs 2.78 lakhs crore for FY 2024-25. Furthermore, Rs 2.55 lakhs crore has been allocated for the Ministry of Railways, surpassing the previous years record of Rs 2.4 lakhs crore. Three major economic railway corridor programmes (i) energy, mineral and cement corridors, (ii) port connectivity corridors, andto significantly improve by (iii) high traffic density corridors, are identifiedunder the
PM Gati Shakti to be implemented to improve logisticsimproved efficiency and reduce cost.
(Source: Ministry of Finance)
Outlook
India?s economic outlook is optimistic, with robust domestic demand, a broad-based revival in manufacturing and services sectors, increased capital expenditure, proactivepolicymeasuresbythegovernment,andpositive business and consumer sentiments, providing impetus to the growth momentum going forward. According to the IMF, the Indian economy is expected to grow steadily at 6.8 % in FY 2024-25 and 6.5% in FY 2025-26. There are potential risks to Indias economic trajectory stemming from factors such as escalating geopolitical conflicts, political stability, fluctuations in global financial markets, geoeconomic fragmentation, and climate-related shocks. However, India?s advantageous geopolitical position will help it capitalise on supply chain diversification and reshoring, increase its global competitiveness and boost exports. Furthermore, a conducive domestic policy environment will strengthen the infrastructural and manufacturing base, ensure efficiencies, create economies of scale, increase exports and make India an integral part of the global value chain. The substantial increase in capital expenditure for infrastructure development, with a focus on projects such as the development of railway corridor projects, roads and logistics is poised to revolutionise multi-modal connectivity across the country, positioning India as a prominent global industrial hub. The establishment of Dedicated Freight Corridors (DFCs) is expected to play a crucial role in streamlining freight logistics, reducing costs, and facilitating easier access to the Northern hinterland via Western Ports, while also stimulating the development of new industrial hubs and Gati Shakti Cargo Terminals. Moreover, DFCs will also alleviate congestion on India?s heavily burdened roads and highways. The shift from diesel-operated trucks to electrified rail, along with the implementation of energy-efficient corridors, is expected to curtail India?s fossil fuel consumption and contribute to a reduction in the nation?s carbon footprint.
Furthermore, the flagship initiative ‘Sagarmala?, with a strategic focus on modernising Indian ports, enhancing port connectivity, fostering Port Led Industrialisation, Coastal Shipping and Inland Water Transport (IWT) and Coastal Community Development, encompasses 839 projects worth investment of ~Rs 5.8 lakhs crore for implementation by 2035. Out of which, 262 projects worth ~Rs 1.4 lakhs crore have been completed and the remaining projects are under various stages of implementation and development. The Sagarmala program is a pivotal initiative aimed at connecting Indian ports with industrial clusters, thereby reducing logistics costs, and serving as a vital engine for economic growth. India is also striving to achieve sustainability goals through decarbonisation and leveraging growing investment and trade opportunities through enhanced technology transformation and improved governance to ensure inclusive and broad-based growth. Amid a volatile global macro environment, the Indian economy is poised to emerge as one of the global economic powerhouses and become the third-largest economy in the world by 2030.
(Source: IMF Economic Outlook, April 2024; Economic Times)
Industry Review
Global Ports Sector Review
The global merchandise trade has grown by 12.4% in value terms in 2022, driven by high commodity prices and inflation. However, in volume terms, Global merchandise trade growth has subdued to 2.7% in 2022, as compared to the growth of 9.4% in 2021. 2023 saw further moderation of the merchandise volume growth, with WTO downgrading its projection from 1.7% to 0.8%. The Global Maritime trade volume, however, contracted marginally by 0.4 per cent in 2022 to 12 billion Metric tons and is expected to grow by 2.4 per cent in 2023. The industry remains resilient, and the volumes are expected to grow continuously but moderately for the medium term (2024–2028), as per UNCTAD review of maritime transport 2023. However, containerised trade, measured in metric tonnes, declined by 3.7% in 2022. UNCTAD projects it will increase by 1.2% in 2023 and expand by over 3% during the 2024-28 period, although this rate is below the long-term growth of about 7% over the previous three decades. Starting in early 2022, seaborne trade, in particular dry bulk and tanker shipments, has been impacted by the war in Ukraine. In 2023, Global merchandise trade has contracted in real terms in 2023 by 1%. The impact is more substantial on the global seaborne trade mainly due to the Panama Canal crisis and Red Sea crisis. The ripple effect of these changes is even more substantial. It has pushed up the freight rates of routes that do not cross these hotspots, due to the unsettling impact on global shipping and logistics. Despite such sharp increases, freight rates remain far below the record highs of late 2021 or early 2022. Yet the monthly levels of March 2024 of the Shanghai Containerised Freight Index or the Dry Bulk Index stood above the 85th percentile of their distribution (starting from late 2009). Going forward, the situation in the Panama Canal is expected to improve after the rainy season begins in late April–early May. These changes have led to changes in shipping patterns and increased the distances travelled for commodities, especially oil and grain. Growth in tonne-miles exceeds growth in tonnes in 2022 and 2023. These average distances are further expected to increase in 2024 due to these reasons.
In 2022, oil and gas trade volumes witnessed robust annual growth rates, of 6% and 4.6%, respectively. The increase can be attributed to heightened demand for fuel as the pandemic eased and related restrictions were lifted. As spending on energy-intensive services like transport and travel gradually recovered, a return to normalcy contributed to the surge in oil demand. In contrast, containerised and dry bulk shipments declined in 2022. Weakened containerised trade reflects the slowdown in global economic growth, high inflation and normalising of demand after the unusual surge during the COVID-19 pandemic. In 2023, oil cargo distances reached long-term highs, driven by disruptions from the war in Ukraine. Crude oil distances, as the andrefined
Russian Federation sought new export markets for its cargo and Europe looked for alternative energy suppliers. Shipments of grains travelled longer distances in 2023 than any other year on record. Although grain shipments from Ukraine resumed in 2022 thanks to the Black Sea Initiative, several grain-importing countries had to rely on alternative grain exporters. They are instead buying from the United States of America, or Brazil, which requires longer hauls. Containerised trade distances have tumbled since 2020 butincreasedmarginallyin2023.Intra-Asiancontainerised trade, which accounts for the majority of intraregional trade, saw its share increase over the years. As intra-Asian trade is carried over shorter distances, the average distances travelled per tonne of container cargo of global containerised trade are relatively low. The predominance of intra-Asian containerised trade flows reflects global manufacturing patterns with China continuing to serve as the leader in global manufacturing, supported by neighbouring East Asian countries. It also reflects the growing participation of several East Asian countries in regional and global value chains.
Container shipping connectivity remains below pre-COVID-19 levels in small island developing States. As container shipping transitioned from the historical boom of 2021, the freight rates have come down near the pre-pandemic rates. The market normalised and capacity levels shifted with an influx of new container ship capacity in 2023. Capacity is expected to shift further as more container vessels are expected to hit the water in 2024 and 2025. Liner operators are adopting different strategies to tackle overcapacity, including rerouting, blank sailing, reducing speed and idling ships. However, due to red sea disruptions, there is a temporary shortage of supply.
In 2024, IMO will introduce a significant development in port infrastructure with the mandatory implementation of Maritime Electronic Single Windows. This mandate will have far-reaching implications, requiring enhanced interoperability and seamless coordination among port agencies. The Maritime Electronic Single Window aims to establish a robust digital framework to optimise port operations. This calls for strong support and focus from all IMO members, especially developing countries and Least Developed Countries, which lag in implementing similar WTO measures under the Agreement on Trade Facilitation.
(Source: UNCTAD Review of Maritime Transport 2023, WTO global trade update March 2024, Drewry Q4-23 forecast)
Comprehensive global recovery in maritime transport: 7 priority action
The Review of Maritime Transport 2023 report identifies following 7 priority action areas to address the global logistics logjam and build more resilient and sustainable maritime supply chains.
b. Monitor Trends: Track ship finance and shipbuilding yard capacity for fleet renewal.
c. Enhance Knowledge: Share information and improve understanding of fleet renewal challenges.
d. Upgrade Skills: Provide crew training in modern technologies and alternative fuels.
3. Facilitate Fuel Transition and Equitable Decarbonisation:
5. Understand Alternative Fuel Costs:
a. Research freight market trends related to shipping?s energy transition. b. Monitor alternative fuel prices and implications for freight costs, ensuring transparent and competitive markets.
6. Enhance Port Efficiency and Collaboration:
a. Digitalisation and Sustainable Infrastructure:
Ports can improve efficiency through digitalisation, sustainable infrastructure, and stakeholder collaboration.
b. Transparency and Decision-Making: Port performance metrics should guide decision-making and promote transparency. Governments should encourage public-private collaboration to enhance port infrastructure and simplify customs processes.
India?s EXIM Trade
Significant Growth in Indias EXIM Sector Signals
Accelerated Expansion
Despite persistent global challenges, overall exports (merchandise + services) for FY 2023-24 surpassed previous period?s highest record. India attained exports worth USD 776.68 billion in FY 2023-24 as compared to USD 776.40 billion in FY 2022-23. In addition, FY 2023-24 closed with highest monthly merchandise exports of FY 2023-24 in March 2024 at USD 41.68 billion. In FY 2023-24, the growth has mostly come in Electronic Goods, Drugs & Pharmaceuticals, Engineering Goods, Iron Ore, Cotton Yarn/Fabs./Made-ups, Handloom Products etc. and Ceramic Products & Glassware. Non-petroleum & Non-Gems & Jewellery exports increased by 1.45% from USD 315.64 billion in FY 2022-23 to USD 320.21 billion in FY 2023-24. Electronic goods exports increased by 23.64% from USD 23.55 billion in FY 2022-23 to USD 29.12 billion in FY 2023-24. Drugs and pharmaceuticals exports increased by 9.67% from USD 25.39 billion in FY 2022-23 to USD 27.85 billion in FY 2023-24. Engineering Goods exports increase by 2.13% from USD 107.04 billion in FY 2022-23 to USD 109.32 billion in FY 2023-24. Exports of Agricultural commodities namely Tobacco (19.46%), Fruits and Vegetables (13.86%), Meat, dairy & poultry products (12.34%), Spices (12.30%), Cereal preparations & miscellaneous processed items (8.96%), Oil seeds (7.43%) and Oil Meals (7.01%) exhibited growth in FY 2023-24.
Overall trade deficit is estimated to significantly improve by 35.77% from USD 121.62 billion in FY 2022-23 to USD 78.12 billion in FY 2023-24; Merchandise trade deficit improved by 9.33% at USD 240.17 billion in FY 2023-24 as compared to USD 264.90 billion in FY 2022-23.
Unprecedented Growth in Manufacturing Exports
Manufacturing has emerged as an integral pillar in the country?s economic growth, owing to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. With 17% of the nation?s GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy. Through the implementation of different programmes and policies, the Indian government hopes to have 25% of the economy?s output come from manufacturing by 2025. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of USD 3.4 trillion along with a population of 1.48 billion people, which will be a big draw for investors.
The manufacturing sector has emerged as a key driver of export growth, fuelled by various factors such as increasing competitiveness, improved production capabilities, and a conducive business environment. This surge in manufacturing exports highlights Indias ability to meet global demand for diverse products, ranging from automobiles and machinery to textiles and electronics. The sectors robust growth not only enhances Indias export revenue but also strengthens its position as a global manufacturing hub.
PLI Scheme and Growth Ecosystem
Indian government implemented the production-linked incentive (PLI) scheme in 14 key manufacturing sectors, allocating Rs 1.97 lakhs crore in November 2020. The PLI scheme aimed to incentivise manufacturing across 14 sectors by encouraging companies to invest in increasing production. The ultimate goal is to create jobs and enhance India?s GDP.. The incentive rates follow a tapering format, motivating industries to unlock their potential and become self-sustaining even after the incentive regime ends. The PLI scheme has shown success in sectors such as electronics, pharmaceuticals, food products, telecom, and drones, attracting significant investments creating jobs. S&P Global?s CRISIL Market Intelligence & Analytics predicts that the scheme could attract Rs 2.76 lakhs crore worth of capital expenditure from the private sector over seven years (2020-21 to 2026-27). This infusion is expected to increase India?s average industrial capex significantly.
As of November 2023, the PLI scheme has attracted investments of over Rs 1.03 lakhs crore, resulting in substantial production and sales. It has also facilitated employment opportunities for over 6.78 lakhs individuals. In electronics manufacturing, 97% of mobile phones sold inIndiaar enowmadedomestically,whilepharmaceuticals have developed 35 key chemical inputs domestically. Other sectors, such as food products, telecom, and drones, have also seen increased investments and production. The schemes focus on advanced technologies has enhanced competitiveness, and incentives for green technologies align with sustainability goals. Initiatives for logistical connectivity and inclusive approaches empower industries and artisans. Overall, the PLI scheme has bolstered domestic production, reduced import dependence, created jobs, and positioned India as a resilient player in global value chains.
Foreign Trade Policy 2023 Paves the Way for Exponential Export Growth
Foreign Trade Policy 2023 (FTP 2023) was launched on March 31, 2023 in New Delhi by the Union Minister of Commerce and Industry, Shri Piyush Goyal. The Key Approach to the policy was based on these 4 pillars: (i) Incentive to Remission, (ii) Export promotion through collaboration – Exporters, States, Districts, Indian Missions, (iii) Ease of doing business, reduction in transaction cost and e-initiatives, and (iv) Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy. It focused on emerging areas like dual use high end technology items under SCOMET, facilitating e-commerce export, collaborating with States and Districts for export promotion. The FTP 2023 encouraged recognition of new towns through "Towns of Export Excellence Scheme" and exporters through "Status Holder Scheme".
Key Achievement under Foreign Trade Policy 2023:
The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry implemented the Advance Authorisation Scheme under the FTP 2023, which allows duty-free import of inputs for export purposes. To make the norms fixation process more efficient, user-friendly and searchable database of Ad-hoc
Norms fixed in the previous years. be used by any exporter without requiring a Norms Committee review.
An initiative to issue system based automatic ‘Status
Holder? certificates under FTP 2023 was launched in
October 2023. Now the exporter will not be required to apply to the office of DGFT for a Status Certificate e in global and the export recognition will be provided by the IT system based on available Directorate General of Commercial Intelligence and Statistics (DGCIS) merchandise export electronic data and other risk parameters. This perspective is a paradigm shift in doing things as it not only reduces compliance burden and promotes ease of doing business but also recognises the need for and importance of collaboration within the Government. The Status
Holder certification program provides credibility to the Indian exporters in the international markets.
Four new towns have also been designated as Towns of Export Excellence (TEE), which gives special benefits(e.g. access to government funding) and improves brand recognition in the global market. These towns are Faridabad, Mirzapur, Moradabad, and Varanasi.
Green Initiatives: Battery electric vehicles, vertical farming equipment, and green hydrogen eligible for reduced obligation under the Export Promotion Capital Goods (EPCG) scheme. The policy has also introduced provisions for merchanting trade, which refers to the shipment of certain goods from one foreign country to another foreign country through an Indian intermediary, without the goods touching Indian ports. More specifically, the government has broadened the range of items allowed for merchanting trade. In addition to the 2024 FTP, other policy changes in recent years have aimed at making it easier to do business. Most notably, several processes have been digitised to reduce paperwork and increase approval speed. Moreover, businesses also are able to apply online for all Directorate General of Foreign Trade (DGFT) schemes, with a centralised DGFT helpdesk service to help business owners address any of their international trade issues.
India Aims for Trade Expansion: Growing List of FTAs in Focus
India has been actively engaged in discussions and negotiations for free trade agreements (FTAs) with various partners, both on a bilateral and regional level, in recent past. The primary objective of these agreements is to stimulate the growth of export-oriented domestic manufacturing in India. Recently, the stakes have beennormscan raised even higher, as India has set ambitious goals for the next 25 years. India aims to achieve a remarkable milestone of USD 2 trillion in exports of goods and services by the year 2030. Furthermore, India has set its sights on becoming a USD 30 trillion economy by 2047, with . significant 25%
As a result, securing early harvest deals and forging free trade pacts have become crucial priorities for India, despite traditionally adopting a more cautious approach to international trade. India has been actively engaged in Free Trade Agreements (FTAs) with various countries and regions. Till FY 2023-24, India signed several significant
FTAs to enhance trade relations and boost exports. Here are some key highlights:
1. Japan: India has a Comprehensive Economic Partnership Agreement (CEPA) with Japan. This agreement facilitates trade and economic cooperation between the two nations.
2. South Korea: India has a Comprehensive Economic Partnership Agreement (CEPA) with South Korea. This FTA aims to strengthen bilateral trade ties and promote investment.
3. ASEAN Region: India has signed FTAs with countries in the ASEAN region, including the India-ASEAN FTA, India-Singapore CECA, and India-Malaysia CECA. These agreements promote economic integration and facilitate smoother trade flows.
4. South Asian Association for Regional Cooperation (SAARC): India has FTAs with SAARC member countries, such as the SAFTA Agreement, India-Sri Lanka FTA, and the India-Nepal Treaty of Trade. These agreements aim to enhance regional economic cooperation.
5. Mauritius: India has a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with Mauritius. Although it?s too early to quantify the benefits, this agreement was implemented in April 2021.
6. United Arab Emirates (UAE): India has a Comprehensive Economic Partnership Agreement (CEPA) with the UAE. Similar to the Mauritius agreement, it?s too early to calculate the quantifiable benefits as it was implemented in May 2022.
7. Australia: India and Australia have signed the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA), although it has not yet been implemented as of now.
Additionally, India has signed 6 Preferential Trade
Agreements (PTAs), including the Asia Pacific Trade
Agreement (APTA). All of India?s RTAs (Regional Trade Agreements), as listed above, have exit clauses.
Furthermore, India is strategically shifting its FTA approach from East to West, targeting major world economies for FTAs in 2024-25. Negotiations are underwaywithcountriesliketheUK,USA,EU,Switzerland, Norway, and Russia.
In summary, India?s FTAs play a crucial role in fostering economic cooperation, expanding markets, and promoting investment opportunities globally.
Indian ports sector review
Cargo traffic at Indias 12 showed a growth of 4.38% to 817.98 MMT from 783.62 MMT cargo throughput in FY 2022-23. EXIM cargo handled at Major Ports increased by 5.12% from 600.03 MMT during FY 2022-23 to 630.76.9 MMT in FY 2023-24. The Coastal Cargo handled at Major port also increased by 1.97% from 183.59 MMT during FY 2022-23 to 187.21 MMT handled during FY 2023-24.
Cargo traffic at Non-Major Ports during FY 2022-23 increased by 8.5% to 649.9 MMT from 599.1 MMT handled in FY 2021-22. EXIM cargo traffic handled at Non-Major Ports in FY 2022-23 increased by 4.3% to 530.9 MMT from 509.1 MMT during FY 2021-22.
The coastal cargo traffic handled at Non-Major Ports during FY 2022-23 increased by 32.1% to 119.0 MMT from 90.1 MMT handled during FY 2021-22.
Key ports performance
Mormugao Port recorded highest growth of 16.44% in traffic handled at Major followed by New Mangalore (10.36%), Visakhapatnam (9.95%), VOC (8.83%), Paradip (7.4%), Mumbai (5.74%), Chennai (5.39%), Kamarajar (4.07%), Kochi (3.01%), JNPA (2.31%), SMP Kolkata (1.82%). The only Major Ports that recorded negative growth in traffic was Deendayal Port
(4.17%) in FY 2023-24.
For Non-Major Ports amongst the State Maritime/State Directorate, Gujarat Maritime Board led with 449.25 MMT [share of 62.31%] portsduringFY2023-24 followed by Andhra Pradesh Maritime Board (16.29%), Maharashtra Maritime Board (10.36%), Directorate of Ports Odisha (7.52 %), Directorate of Ports, Puducherry (1.71%) and Tamil Nadu Maritime Board (1.40%) among others in FY 2023-24. In coastal cargo, Gujarat Maritime Board again led with 47.67 MMT [share of 34.81%] followed by Maharashtra Maritime Board (33.6%), Andhra Pradesh Maritime Board (25.96%), Directorate of Ports, Odisha (3.77%), A&N Islands (1.41%), Tamil Nadu Maritime Board (0.23%), and Others.
(Source: Transport Research Wing of Ministry of Ports, Shipping and Waterways)
Trends in All India Cargo Handling (FY23-FY24)
The commodity-wise trendline among Major Ports, Non-Major Ports and consolidated cargo handled is as indicated below:
>Major Ports |
Non-Major Ports |
All India Ports |
||||
Commodity |
||||||
| FY 2022-23 | FY 2023-24 | FY 2022-23 | FY 2023-24 | FY 2022-23 | FY 2023-24 | |
| POL Crude | 161.1 | 169.2 | 91.4 | 89.8 | 252.5 | 259.1 |
| POL Products | 57.4 | 61.6 | 72.4 | 73.8 | 129.8 | 135.5 |
| LPG or LNG | 15.8 | 16.4 | 19.8 | 23.4 | 35.6 | 39.8 |
| Edible Oil | 11.9 | 11.4 | 3.6 | 3.7 | 15.5 | 15.1 |
| Iron Ore Pellets/Fine | 46.5 | 59.8 | 53.0 | 76.2 | 99.5 | 135.9 |
| Thermal and Other Coal | 148.8 | 154.8 | 140.2 | 168.2 | 289.0 | 323.0 |
| Coking Coal | 38.7 | 36.6 | 39.3 | 39.2 | 78.1 | 75.8 |
| Fertilisers and FRM | 22.9 | 23.2 | 16.0 | 15.2 | 38.9 | 38.4 |
| Food Grains | 7.3 | 2.2 | 6.0 | 3.6 | 13.3 | 5.9 |
| Iron and Steel | 9.4 | 11.4 | 4.7 | 4.8 | 14.1 | 16.2 |
| Project Cargo | 0.9 | 0.8 | 0.3 | 0.2 | 1.2 | 1.1 |
| Container (Tonnes) | 170.2 | 181.5 | 115.8 | 135.9 | 286.0 | 317.4 |
| Container (mTEUs*) | 11.4 | 12.3 | 8.7 | 9.7 | 20.1 | 22.0 |
| Others | 92.6 | 88.8 | 86.1 | 87.1 | 178.7 | 175.9 |
Total |
783.6 | 818.0 | 648.5 | 721.0 | 1432.2 | 1539.0 |
Over a consolidated market share analysis at All India level, the cargo handling has grown by 7% on a year-on-year basis to 1,539 million MT of handling. The year-on-year growth for major ports has been 4% at 818 million MT while the growth for non-major ports has been at 11%. The commodity which has depicted the maximum growth on a year to year basis is Iron Ore Pellets and Fines which has grown at 37%, followed by Iron and steel (15%), LPG/ LNG (12%) and thermal and other coal (12%), Containers (9%) and others.
Recent developments of importance for the Indian ports sector
World Bank Logistics Index Report 2023: The report was released in April 2023 and reported that India has reached 22nd rank in International Shipment category as against 44th rank in 2014. It was also reported that the average Container Dwell Time in India has reached a level of 3 days only as compared to 4 days for countries like UAE and South Africa, 7 days for USA and 10 days for Germany. In addition, Indian Ports "Turn Around Time" has reached 0.9 days which is better than USA (1.5 days), Australia (1.7 days), Singapore (1.0 days) etc. This goes a long way in demonstrating the positive steps taken by the Government of India for advancing the development in the domestic ports and logistics sector in the country.
The Amrit Kaal Vision 2047, formulated by the Ministry of Ports, Shipping & Waterways, builds on the Maritime India Vision 2030 and aims to develop world-class ports and promote inland water transport, coastal shipping, and a sustainable maritime sector. It encompasses aspirations in Logistics, Infrastructure, and Shipping, supporting Indias Blue Economy. The vision, shaped through over 150 consultations with various stakeholders and the analysis of 50 international benchmarks, outlines more than 300 actionable initiatives for enhancing ports, shipping, and waterways by 2047
The extension of the manufacturing hub associated with global supply chains could enhance demand for the ports sector industry for cargo commodities like iron ore and fertilisers. Iron ore and finished fertilisers shipments have seen a growing trend, ensuring that major ports tide over decreasing volumes in coal and miscellaneous cargo.
The Union Government permitted Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects.
To meet the larger vision of achieving Zero Carbon Emission Goal, launched ‘Harit Sagar? the Green Port Guidelines on May 10, 2023. Several APSEZ ports are harnessing the renewable power sources to power the operations within the port.
Better rural connectivity, port advancements, moderation of logistics costs and lower turnaround time are anticipated to enhance revenues.
The National Logistics Portal (Marine) was inaugurated on January 27, 2023, by the Honourable Minister for Ports, Shipping, and Waterways. The NLP is a one-stop platform connecting all stakeholders in the logistics community through
IT, aimed at improving efficiency and transparency while reducing costs and time delays. The NLP covers all modes of transport, including waterways, roadways, and airways, and provides a seamless end-to-end logistics service coverage.
Sharp rise in coastal movement owing to power demand from shore-based power plants leveraging the RSR (Rail – Sea – Rail) mechanism and movement of domestic coal from Paradip apart from rise in coastal POL movements.
Operation and maintenance services such as pilotage, dredging, harbouring and provision of marine assessments such as barges and dredgers are anticipated to grow. Growing investment and cargo traffic marks a healthy prospect for port support services.
On March 23, 2023, the Union Minister for Ports, Shipping and Waterways launched Sagar Manthan, a digital platform containing comprehensive data related to the Ministry and all its organisations. The Real-time Performance Monitoring Dashboard facilitates the monitoring of projects, KPIs,
Maritime India Vision 2030, and financial and operational parameters.
Mormugao Port launched "Harit Shrey" scheme offering incentives to ships with good ESI score. The aim is to promote green initiatives and improve sustainability of port operations. M.V August
Oldendorff was the first ship to receive the green incentive.
Indian logistics industry review
Transport and Logistics sector form the backbone of India?s fast-paced growth. Rapid infrastructure development, government initiatives to boost exports like "Make in India", digital initiatives like "ULIP" has given this sector its much-needed growth spurt.
The logistics industry is expected to grow at a CAGR of ~8-10% in the coming years with the top gainers being exports because of emergence of India as a Manufacturing hub. The key opportunity & focus areas for Indian Logistics Sector are as below:
Digitalisation: Through government intervention & digital solutions, digitisation has started in various departments. They still fail to provide an end-to-end visibility of logistics processes leading to inefficient route selection, planning mismatch, manual processes & uninformed decision-making thus increasing the total logistics cost.
Policy: The need for time-bound approval system, clearances and land-acquisition process will largely aid new developments in this sector
Sustainability: Sustainability in supply chain is no longer an option but a need today. Logistics is the when it comes first to reducing carbon footprint. Cost reduction, compliance & push from other stakeholders are the key drivers in improving supply chain sustainability.
Advanced Technology & Newer Business Models:
Decrease in entry barrier, adoption to latest technologies has paved way to disruptions by start-ups. Digital Freight forwarding platforms, on demand services etc., has increased the transparency, tech adoption & speed of cargo.
Government Initiatives
Government of India continues the efforts to develop logistics sector through various initiatives. In the Interim Budget FY 2024-25, the allocation for infrastructure has been increased to Rs 11.11 lakhs crore.
The government also announced three major rail corridor programmes:
Energy, mineral & cement corridors
Port connectivity corridors
High-traffic density corridors
National Logistics Policy – Progress so far
It has been more than a year since the National Logistics Policy was launched on September 17, 2022. The vision of NLP is to drive economic growth and business competitiveness fifth edition of LEADS-2023of the country through an integrated, seamless, efficient, reliable, green, sustainable and cost-effective logistics network by leveraging best-in-class technology, processes and skilled manpower.
Since then, significant progress has been made in various aspects of implementation of policy. Multiple workshops, interactions & meetings were from held state / UT, with the ministries, officials representatives from various industries to drive the implementation of NLP
CLAP – a part of NLP, saw a registration of 600+ industry players on the ULIP platform.
CPCP – Comprehensive Port Connectivity Plan, identified 100+ road and rail infrastructure gaps and sanctioned 107 projects to address the same.
Using the data from Logistics Data Bank (LDB), analysis regarding turnaround times between port & CFS/ICD is being done to improve performance.
Coal Logistics Plan and Policy
The Ministry of Coal launched Coal Logistics Plan and Policy (CLPP) to address the need for efficient logistics to meet the increasing demand for coal.
Target: y 14% reduction on rail logistics cost y Rs 21,000 crore annual cost savings y 10% reduction on average turnaround time of bulk wagons y Reduced pollution & traffic congestion
Action plan: y Increased capacity through new rail lines & freight corridor y First-mile connectivity projects y Increased emphasis on rail-sea-rail routes for coal transport y Data-driven decision support system through smart analytics dashboards.
Impact: y Reduction in TAT & congestion will lead to increased loadings thus benefiting rakes operating under GPWIS
Logistics Ease Across Different States 2023 (LEADS 2023)
LEADS is a unique initiative of the Government of India to assess the logistics ecosystem across States and Union
Territories.The the framework of LEADS-2022 with more enhancements to accurately capture specific improvements in First mile/Last-mile connectivity, packaging facility, & skilled manpower availability.
As per the earlier adopted framework, States & UTs were placed into four groups namely,
Coastal
Landlocked
North-East
Union Territories
Based on their performances, they were classified into three levels: Achievers (states and UTs achieving 90% or more), Fast Movers (states and UTs scoring between 80 and 90%), and Aspirers (states and UTs with percentage scoring below 80%).
Performance Levels Categories |
Achievers | Fast Movers | Aspirers |
| Coastal States | Andhra Pradesh, Gujarat, | Kerala, Maharashtra | Goa, Odisha, West Bengal |
| Karnataka, Tamil Nadu | |||
| Landlocked States | Haryana, Punjab, | Madhya Pradesh, | Bihar, Chhattisgarh, |
| Telangana, Uttar Pradesh | Rajasthan, Uttarakhand | Himachal Pradesh, Jharkhand | |
| North-Eastern Region | Assam, Sikkim, Tripura | Arunachal Pradesh, | Manipur, Meghalaya, Mizoram |
| Nagaland | |||
| UTs | Chandigarh, Delhi | Andaman & Nicobar, | Daman & Diu/Dadra & |
| Lakshadweep, | Nagar Haveli, Jammu & Kashmir, | ||
| Puducherry | Ladakh |
Sagarmala Pariyojana
Sagarmala was rolled out in April 2016 to reduce the logistics cost for domestic as well as EXIM cargo with optimised infrastructure investment. The port-led development focuses on logistic-intensive industries, which would be supported by efficient and modern port infrastructure and seamless multi-modal connectivity. The primary objective of Sagarmala is to promote port-led direct and indirect development, and ensure quick, efficient, and cost-
At an overall level, as of March 2023, 221 projects worth
Rs 1.12 lakhs crore have been completed out of 802 identified projects worth Rs 5.4 lakhs crore under the scheme; 581 projects worth Rs 4.27 lakhs crore are under implementation and various stages of development. Over the next stage of Sagarmala, Central government is targeting to build 14 new ports worth Rs 1.25 trillion.
Digitisation of ports: Significant efforts have been made to digitise major EXIM processes at key ports. The government has introduced digitisation for processes such as Electronic Invoice (e-Invoice), Electronic Payment (e-Payment), and Electronic Delivery Order (e-DO) for the physical release of cargo by custodians. The generation of electronic Bill of Lading (e-BL) has also been implemented, along with the digitisation of the Letter of Credit (LC) process. The government is working towards achieving complete integration between PCS 1x, a cloud-based new generation technology, and Indian Customs EDI Gateway (ICEGATE) for seamless data exchange. Additionally,
RFID solutions have been implemented at all key ports to facilitate uninterrupted movementoftrafficacross port gates and reduce the need for extensive documentation checks. The Ministry of Ports, Shipping and Waterways has set up an Enterprise Business System (EBS) at five major ports in India (Mumbai, Chennai, Deendayal,
Paradip, and Kolkata, including Haldia Port). The EBS aims to provide a digital port ecosystem that adopts leading international practices while remaining aligned with local needs. As part of the EBS implementation, a evacuation of cargo. total of 2,474 processes were standardised, resulting in a final count of 162 redesigned processes.
Performance Overview
During the year under review, APSEZ performance was good & promising with cargo volumes witnessing a robust 24% YoY growth. The Company dominated on all fronts; Mundra Port retained its top position as the largest port in India, handling 179.58 MMT of cargo in FY 2023-24. The total cargo handled across all Adani ports was 419.95 MMT, including 11.51 MMT cargo handled at Haifa Port, Israel. In India, APSEZ ports have handled 408.44 MMT cargo, through our 12 operating ports/ Terminals. APSEZ India ports portfolio has witnessed around 21% YoY volumes growth. Dry cargo volume crossed 219 MMT, registering 27% YoY growth. Key growth commodities in dry cargo were Coal, Iron ore, and other certain minerals. Coastal coal has witnessed massive 80% YoY growth (33.09 MMT in FY 2023-24 against 18.43 MMT in FY 2022-23). In India, APSEZ ports container volume reached 9.7 MTEUs volume against 8.6 MTEUs in FY 2022-23, registering 13% YoY growth. APSEZ Mundra Port has maintained its top position in container volume handling, Mundra has handled 7.42 MTEUs in FY 2023-24 against 6.64 MTEUs in FY 2022-23, registering 12% YoY volume growth. Out of APSEZ?s 12 operating ports, 11 ports have witnessed YoY volume growth. Mundra Port has witnessed around 16% YOY volume growth, handled 179.58 MMT; Tuna Port has handled 9.73 MMT, with 19% YoY growth; , Hazira Port has handled 26.40 MMT cargo, with 4% YoY growth; Dighi has handled 0.55 MMT cargo; Goa terminal has handled 4.59 MMT cargo registering 3% YoY growth; Karaikal Port handled 12.28 MMT cargo, Ennore container terminal has handled 12.95 MMT cargo, with 57% YoY volume growth; Kattupalli Port has witnessed 4% YoY growth, handled 11.93 MMT cargo, Krishnapatnam Port has handled 59.21 MMT cargo, with 23% YoY growth, Gangavaram Port has handled 37.24 MMT cargo, registering 15 % YoY growth; and Dhamra Port has handled 42.81 MMT cargo, with a 37% YoY growth.
Operational Highlights
Ports Business
In FY 2023-24, APSEZ handled ~27% of the country?s total cargo and ~44% of container cargo
Overall, cargo volumes recorded a healthy 24% YoY growth to 420 MMT
Dry cargo volumes growing by 29%, container cargo by 20% and liquid & gas (incl. crude) by 15%
10 domestic ports in APSEZ portfolio recorded their highest ever cargo volumes
APSEZ domestic cargo volumes grew by 21% YoY vs 7.5% growth in India?s cargo volumes in FY 2023-24
APSEZ achieved a key milestone of crossing 400 MMT of domestic cargo volumes in 360 days
The flagship port, Mundra Port crossed the 7.4 million TEUs mark, which is 15% higher than its closest competitor
Mundra Port recorded another milestone of handling highest ever monthly cargo by any port in India by handling 17 MMT of cargo in March 2024
APSEZ acquired Karaikal Port and signed definitive agreement to acquire 95% stake in Gopalpur Port in FY24, thereby boosting its hinterland access in the southern and eastern part of the country.
APSEZ Established a joint venture (JV) with MSC for Ennore Container Terminal by divesting 49% stake for an equity consideration of Rs 247 crore
The Dhamra LNG Terminal (a JV of APSEZ and TOTAL Energies) commenced commercial operations
The Hazira Port completed extension of CB3 berth
The Vizhinjam Port berthed four project vessels in FY 2023-24 and the port is targeting commissioning in Q1 FY 2024-25
The Colombo terminal received financing commitment of USD 553 million from DFC and is targeting commissioning before end of FY 2024-25
APSEZ affected the following asset enhancements resultingcargovolumecapacityanddebottlenecking: y Dhamra Port commissioned a 9.7 km railway line for doubling the rail capacity y Gangavaram Port inducted 2 new locomotives while Krishnapatnam Port inducted 1 new locomotive y Dahej Port completed overhead electrical line extension, enabling movement of electric locomotives y Kattupalli Port added three new e-RTGs and four 5,000 KL tanks y Mundra Port added 2 cranes for handling larger count of rakes daily
Logistics Business
Rail volume grew 19% YoY to 0.6 million TEUs
Terminal volume saw a growth of 5% YoY to 0.38 million TEUs
Registered a growth of 40% YoY to 20.1 MMT in the Bulk (GPWIS) business
Increased the warehousing space to ~2.4 million sq. ft. from ~1.6 million sq. ft.
Financial Highlights
Revenue
Consolidated revenue grew by 28% to Rs 26,711 crore supported by 30% jump in ports business revenue and 19% in logistics business
Cargo volume growth, and addition of Karaikal Port enabled domestic port revenue increase of 21% to Rs 20,972 crore
Revenue from the logistics business stood at Rs 2,079 crore, a growth of 19% on account of induction of new rakes in GPWIS, and container segment, addition of 3 new MMLPs, 2 new agri silos and warehouses at 2 new locations
EBITDA
Consolidated EBITDA (excl. forex) grew by 24% to
Rs 15,864 crore with Rs 15,246 crore contributed by ports business and Rs 540 crore by logistics business
Domestic port EBITDA grew 24% to Rs 14,907 crore with better sweating of assets (capacity utilisation of 67% in FY 2023-24 vs 56% in FY 2022-23)
Logistics business EBIDTA grew by 11% to
Rs 540 crore on account of new asset additions across sub-verticals
Balance Sheet and cash flow
Net debt to EBITDA improves to 2.3x from 3.1x in FY 2022-23, despite a capex of Rs 7,416 crore
Free cash flow from operations after adjusting working capital changes, capex and net interest cost was Rs 5,791 crore compared to Rs 1,366 crore in FY 2022-23. Increase in free cash flow was primarily on account of increase in cashflow from operating activities
The Board recommended a dividend of Rs 6 per share, a payout of around Rs 1,300 crore, and 16% of the reported PAT
Key financial ratios and return on net worth
The key financial ratios compared to the last financial year are as under:
Particulars |
Current FY ended March 31, 2024 | Previous FY ended March 31, 2023 | Changes between current FY and previous FY |
| Debtors? Turnover | 7.71 | 7.63 | 1% |
| Interest Service | 5.47 | 5.20 | 5% |
| Coverage Ratio | |||
| Current Ratio | 1.05 | 1.42 | (26%) |
| Debt Equity Ratio | 0.87 | 1.09 | (20%) |
| Operating | 59% | 62% | (2%) |
| Profit Margin (%) | |||
| Net Profit Margin (%) | 30% | 26% | 4% |
| Return on | 16% | 14% | 2% |
| Avg Net-Worth (%) |
Notes: a. The above ratios were based on Consolidated Financial Statements of the Company. b. Definitions of ratios:
1. Debtors? turnover: The revenue from operations divided by the average accounts receivable.
2. Interest coverage ratio: earnings available for debt service (PAT + Interest cost+ Foreign Exchange Loss or (Gain) (net)+Depreciation) to interest cost.
3. Current ratio: Current assets by current liabilities. The decrease in the Current Ratio is mainly due to the current maturities of Rs 7,687.99 crore (previous year Rs 2,023.80 crore) in FY 24, out of total Long-Term Debt.
4. Debt-equity ratio: Total debt by shareholders equity.
5. Operating profit margin: EBITDA (Excluding Foreign
Exchange Loss or (Gain) (net) and exceptional item) by Revenue from Operations.
6. Net profit margin: Profit after tax by Revenue from Operations.
7. Return on average net worth: Profit for the year by average net worth for the year.
ESG Highlights
APSEZ is committed to advancing sustainable development within its operations. The company has integrated the principles of resource efficiency, circular economy, reducing ecological impact, ensuring zero harm to workforce, health and safety, and fostering community welfare into its operational philosophy. APSEZ is striving for carbon neutrality by 2025 as a short-term objective and has established robust governance frameworks to consistently pursue the established goals. The company has also set comparable objectives for reducing water consumption, waste disposal, biodiversity loss, and ensuring that all significant supply chain partners undergo ESG risk assessment. Additionally, the United Nations Sustainable Development Goals (UN SDGs) are a fundamental component of APSEZ?s long-term strategy. The company has conducted an internal evaluation to prioritise these goals and has commenced tracking progress towards meeting the targets associated with each relevant SDG.
APSEZ supports and complies with the domestic and international standards and regulations/laws including those related to labour and human rights, such as the Universal Declaration of Human Rights, the UN Principles on Business and Human Rights, and the International Labour Organization Convention.
APSEZ shares the Adani Group?s ambition of planting 100 million trees by 2030.
APSEZ?s emission and water intensity reductions are in line with the targets for the year.
Progress on energy efficiency and fuel switch: At
Dhamra Port, the transition from HPSV lamps to LEDs has been completed and electric vehicles have been introduced for employee transportation within operational areas across ports; at Kattupalli, diesel forklifts have been replaced with battery-operated ones, and at Mundra, the rail line has been electrified.
These initiatives reflect APSEZ?s commitment to sustainable practices.
Biodiversity: APSEZ has raised its mangrove plantation target to 5,000 hectares by FY 2024-25 and successfully completed plantation in 4,240 hectares by the end of FY 2023-24. The restoration project in the Lakhpat region, launched on World Environment Day in 2021, aligns with the UN Decade on Ecosystem Restoration (2021-2030). This project is committed to preserving the Lakhpat area?s natural habitat, particularly for key species such as the chinkara, rehabilitating grasslands for their survival, and indirectly reducing stress on mainland mangroves through landscape conservation.
Progress on renewable energy sourcing: In FY 2023-24, the Company used about 63.4GWh of renewable electricity sourced from captive and PPA-based solar and wind power plants. An additional captive renewable capacity of around 1,000 MW is being installed for future use.
ESG Investments: In FY 2023-24, the Company invested Rs 1,493 crore on projects related to electrification of equipment, rail infra, energy efficiency, emission reduction, environment protection, water management, waste treatment and adaptation to climate change. This investment includes Rs 907 crore spent on purchase of electric equipment at the greenfield and expansion projects.
Human Resources Development
APSEZ considers its people and culture as a competitive advantage, offering a superior proposition to customers and career opportunities to its employees. The company aims to enhance its businesses and expand into new areas while providing a conducive work environment where, a continuous & repeatable cycle of ‘learn – contribute – grow? remain the core of employee value proposition. Alignment and enablement of entire organisation –across locations, functions and tiers through appropriate systems, processes, policies, and programmes to achieve this aspiring growth target has been key focus area for People Management function.
APSEZ has been named the Best Place to Work in the Nation Builder category for three consecutive years. The organisation provides excellent career opportunities and offers various interventions for talent and capability building. Professional growth is encouraged through empowerment and decision-making opportunities, resulting in improved business responsiveness.
APSEZ focused on building capacity at three levels: the organisation, teams, and individuals. It continually improved related systems, processes, and people management practices to enhance employee capabilities. The Company?s average employee age was 41, marked by youth, energy and dynamism. 88% of workforce were engineers or specialised/professional degree holders. The organisation underscores the criticality of capacity management for expansion, highlighting strategic workforce planning, budgeting, and a robust employer value proposition. An asset-based manpower budgeting model underpins this approach. It champions diversity and inclusion, pursuing talent from diverse backgrounds to ensure cultural alignment. Hiring managers are trained for effective candidate evaluation, and an executive pool is curated yearly for structured interviews. Various sourcing channels are leveraged for talent acquisition. Psychometric assessments aligned with the Adani Behavioural Competency Framework (ABCF) evaluate candidates personalities and potential. Leadership roles are subject to comprehensive due diligence.
The Adani Behavioral Competency Framework (ABCF) shapes a capability model that aligns with business objectives, emphasising internal talent development to future-proof the organisation against the complexities of business growth. It encourages nurturing internal talent and acquiring external expertise. Business leaders aim to foster talent with a global perspective, integrating sustainability, governance, digitisation, globalisation, and inclusivity. The model presents a clear career progression path, ensuring visible growth opportunities for employees. The company invests in talent assimilation, offering an extensive induction program that connects new hires with senior leaders to cultivate internal networks and cultural acumen. A Sahyogia buddy aids newcomers during the initial period, complemented by regular feedback sessions for seamless integration. Our recruitment process has evolved with advanced technologies to match the digital shift in business and operations. We also focus on nurturing young leaders through GETs, MTs, PGETs, and AALPs, ensuring a defined career trajectory, diverse functional and geographical experiences, and meticulous progress tracking.
The Company motivated employees through continuous re-learning; improved performance was rewarded. It recognises its workforce as its most valuable asset and is committed to fostering an environment that nurtures growth and development. This commitment is evident in various initiatives like Sammilan, ICEBERG, Takshashila, Northstar, Young Managers Program, and
FULCRUM, which leverage People Analytics for strategic decision-making in areas such as Talent Management, Learning & Development, and Leadership Development. At APSEZ, HR digitisation is a strategic initiative to embrace SMAC technologies, enhancing efficiency and maintaining a human touch. Initiatives like e-portals have streamlined operations, marking progress towards a digital HR revolution. The Recruitment Cloud will elevate recruitment by improving quality, speed, and cost-effectiveness. AI tools will further refine talent acquisition, ensuring high-quality hires in greater volumes. This automated system collects valuable data for AI/ML analysis, fostering a self-improving HR ecosystem. The goal is an integrated HR value chain that enhances employee experiences and drives organisational success through continual agile improvements. Digitisation transcends system upgrades; its about evolving mindsets for swift adoption of top digitisation practices.
People analytics at APSEZ integrates various data sources to boost workforce efficiency and strategic decisions. It focuses on employee performance, workforce planning, skill gaps, recruitment, and attrition. Objective appraisals and talent forecasting are achieved through data-driven methods. Enhanced HR recruitment and hiring are benefits immediate access to essential hiring metrics, aiding the TA team in fulfilling talent requirements swiftly. It also improves sourcing, cost, and time efficiency in
HR processes, ensuring a cost-effective and engaging candidate experience. Additionally, people analytics is crucial for attrition analysis, allowing APSEZs HR to develop proactive retention strategies by examining demographic, performance, satisfaction, compensation, and engagement data to reduce turnover and elevate employee performance.
APSEZ prioritises the wellbeing of our workforce, investing in systems like the Employee Engagement Score and Health & Wellness Index to monitor and enhance employee productivity and satisfaction. Our Emotional Wellness Program, part of Adani Cares, offers 24/7 confidential counselling on various personal and professional issues, ensuring support for our employees and their families. Emphasis is holistic employee wellness, integrating Physical, Emotional, Spiritual, Safety, Diversity & Inclusivity, and Self-sustenance into its business ethos. Leadership is empowered to promote and advocate for a comprehensive well-being culture, supported by resources and partnerships like The Art of Living Corporate Programs like APEX program.
APSEZ has established a robust support system for employee welfare, encompassing health, work-life balance, and financial aid. Health initiatives feature a health center, medical screenings, insurance policies, and parental illness support. Work flexibility is enhanced with adaptablehoursandremoteworkoptions.Educationaland financial benefits are provided through scholarships and loan subsidies. Retirement plans, loan facilities, and a benevolent fund for bereavement aid underscore APSEZs commitment to its employees well-being. APSEZ has initiated an Employee Connect Program to boost workplace belonging and engagement, fostering stronger emotional and social connections, aligning individual and company goals, and creating a cohesive work environment. To enhance workplace engagement and belongingness, the Chairmans Survey: Your Voice Matters invited employee feedback to influence company policies, aligning with organisational goals. Participation is key for collective success. Saksham, APSEZs self-reliance initiative, empowers Adanians to steer their careers through new mindsets, scalable systems, and autonomous processes. It includes, Transparent career paths for self-reliant employees, People Managers empowered to match team skills with business needs, Business Leaders using unified data for informed decisions. of analytics. ORC provides
Madhyam is an innovative Group-level online reward scheme that empowers employees to share ideas directly with the Chairman, impacting strategy and operations. These ideas are evaluated and sorted by their impact, with successful ones earning monetary rewards. The Long Service Award honours employees for their long-term commitment,acknowledgingtheirroleinAPSEZssuccess. The Employee Spot Recognition Scheme celebrates outstanding efforts in energy conservation, waste management, and sustainable commuting, promoting a culture of recognition and encouraging environmental responsibility. Lastly, the Technical Projects drive motivates technical staff to improve plant performance and integrate advanced technology for better business adaptability and plant dependability since 2018.
Strategy
1. ESG Leadership: The company is committed to environmental conservation and societal safety through its Environmental, Social, and Governance (ESG) initiatives.
2. National Footprint Expansion: The company aims to broaden its service offerings, including logistics solutions, rail services, warehousing, grain silos, transportation, and last-mile delivery, to customers across the nation.
3. Global Presence Enhancement: The company plans to expand globally, both organically and through strategic acquisitions, across South Asia, Southeast Asia, the Middle East, Europe, and Africa.
4. Business Mix Diversification: Shifting from a Mundra-centric port business, the company aims to become a global logistics services provider. It seeks east-west parity in India and focuses on high-growth non-port ventures, investing in businesses with attractive Return on Capital Employed (ROCE).
5. Operational Excellence: The Company is focused on sweating its assets, increasing efficiency, anchoring world-class facilities, skills, technology, and a digitised logistics value chain that leverages visibility, analytics, and automation.
6. Customer-Centric Approach: The company strives to be a customer-centric transport utility, offering integrated solutions across India to enhance the customer experience.
7. Strategic Partnerships and Acquisitions: Building on past inorganic growth, the company will continue to forge strategic partnerships within and beyond India for sustained expansion.
Risks and Concerns
APSEZ?s Enterprise Risk Management (ERM) framework involves identifying risks, examining consequences, introducing mitigation strategies, and implementing corrective actions. The scope of the ERM framework at APSEZ is as follows:
Strategic and economic risk: The Company faces various challenges, including economic uncertainty, a potential slowdown, trade policy changes, excessive concentration of business with a few shipping lines or customers, and the need for geographical expansion.
Operational risk: The Company faces various operational risks, such as penalties, theft of shipments, changes in cargo dimensions, damage to assets, and other potential hazards.
Growth risk: The Company faces intense global and domestic competition, which can lead to inconsistent pricing and commercial terms, conflicts with allied infrastructure, challenges in project implementation, and integration.
Reputational risk: The Company may face a cynical perspective from stakeholders, particularly in the event of any unforeseen event, accident, or hazard. The Company faces cost, and challenges associated with capital-intensive and lengthy incubation period projects. ESG risk: The Company faces risks arising from increasing sea levels, natural calamities, fatalities, and noncompliance with various countries? standards of governance, Technology risk: The Company faces risks related to data recovery, system interruptions, cyber security intelligence and robotic process automation.
People risk: The Company faces risks related to workforce management, including the retention of existing talented employees, attracting new talent, labour strikes, and excessive dependence on contractual workforce.
Political risk: The Company faces the risk of delays in project execution due to review of existing policies and approvals.
Projects completion-related risks: The company faces risks related to regional crisis, pandemic, material and manpower availability. In FY 2023-24, APSEZ?s Audit Committee regularly reviewed the risk management reports and suggested corrective actions. Health & Safety risk evaluation was done as per OHSAS 18001 standards and reviewed periodically.
APSEZ manages risks through cargo diversification, strategic capacities, long-term contracts, operational efficiency, cost optimisation and integrated logistics services.
Internal control systems and their adequacy
The Company has put in place strong internal control systems and best-in-class processes commensurate with its size and scale of operations. There is a well-established multidisciplinary Management Audit & Assurance Services (MA&AS) that consists of professionally qualified accountants, certified internal auditors, engineers, MBAs and SAP experienced executives who carry out audits through the year across all functional areas and submit reports to Management and Audit Committee about the compliance with internal control, efficiency and effectiveness of operations and key processes risks.
Some key features of the Company?s internal controls system comprised:
Adequate documentation of policies and guidelines.
Preparation & monitoring of Annual Budgets through monthly reviews of all operating & service functions
MA&AS department prepared risk-based internal audit plan with a frequency of audit based on risk ratings of areas / functions. Scope is discussed amongst MA&AS team, functional heads / process owners / CEO & CFO. The audit plan is formally reviewed and approved by Audit Committee of the Board.
Internal audit process is automated and managed on a documentation platform - Audit Management System.
The Company has a strong compliance management system, underpinned by an online monitoring system.
The Company practices delegation of power with authority limits for approving revenue & capex expenditure.
The Company uses Enterprise Resource Planning (ERP) System (SAP) to record data for accounting, consolidation, and management information purposes.
The Company engages external experts to conduct independent reviews of the effectiveness of business processes.
The Internal Audit is carried out in accordance with auditing standards to review design effectiveness of internal control system & procedures to manage risks, operation of monitoring control, compliance with relevant policies & procedure and recommend improvement in processes and procedure.
The Audit Committee reviews the execution of audit plan and internal audit recommendations including those relating to strengthening the Company?s policies & systems on a periodic basis.
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