Broker’s call: JSW Infra (Buy)

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Target: ₹390

CMP: ₹322.85

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 400 mtpa capacity by FY30 (16 per cent CAGR over FY24-30) is aligned with GoI’s target to 4x India’s existing ports capacity (2,600 mtpa) to 10,000 mtpa by FY47.

Part of the JSW group, JSWIL derives significant volume from its group customer (JSW Steel; 52/60 per cent in H1-FY25/FY24), providing significant visibility and stability to its ports’ volumes. Simultaneously, it has improved its 3rd party volume mix from 6 per cent in FY19 to 48 per cent in H1-FY25, 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) are well placed to meet the targeted capex spends of ₹30,000 crore over FY24-30.