JM Financial's research report on JSW Infrastructure
JSW Infrastructure (JSWIL), India’s second largest private port player, is well positioned to capture the opportunities arising from the government of India’s (GoI) thrust on infrastructure spending and privatisation of port terminals. The company’s ambitious plan to achieve 400mtpa capacity by FY30E (16% CAGR over FY24-30E) is aligned with GoI’s target to 4x India’s existing ports capacity (2,600mtpa) to 10,000mtpa by FY47E. Part of the JSW group, JSWIL derives significant volume from its group customer (JSW Steel; 52%/60% in 1HFY25/FY24), providing significant visibility and stability to its ports’ volumes. Simultaneously, the company has improved its 3rd party volume mix from 6% in FY19 to 48% in 1HFY25, indicating a growing and robust customer base. The company’s acquisition of Navkar Corporation (operates three CFS and one ICD) and Sical’s CTO licence, and a contract to build and operate GCT (Gati-Shakti cargo terminal) are reflective of its intent to create an integrated logistics value chain across key ports, building stickiness for its customers. We believe JSWIL’s robust balance sheet (0.3x/0.9x net debt to equity/ net debt to EBITDA), superior cash flows and possible dilution to meet the public market requirement (promoter holding currently 85.6%) are well placed to meet the targeted capex spends of INR 300bn over FY24-30E.
Outlook
We estimate JSWIL to generate revenue/EBITDA CAGR of 20%/18% over FY24-27E on the back of capacity addition (brownfield expansion) and growing customer base. We value the company on 25x FY27 EV/EBITDA to arrive at Mar’26TP of INR 390. We maintain BUY.
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