Shares of JSW Infrastructure (JSW Infra) rose 10 percent by Wednesday, October 30th following the release of its second quarter results after market hours on October 28th. JSW Infrastructure, a recently listed company, is up 166% from its IPO price. . What moves stock prices?
Riding the growth of cargo handling
For the quarter ended September 2024, JSW Infrastructure’s revenue, EBITDA and PAT increased by 21.5%, 21.6% and 46.1% YoY on a consolidated basis to Rs 1,088 crore, Rs 670 crore and Rs 374 crore, respectively. It amounted to 10,000 rupees. but. EBITDA and PAT increased by approximately Rs 155 million due to foreign exchange gains. Adjusted for this, EBITDA and PAT decreased by approximately 9% and 13% year-on-year due to a 30% increase in depreciation and amortization (as a result of increased capital expenditures).
The revenue growth was primarily due to an increase in cargo volume from 23.7 million metric tons (MT) in 2Q FY24 to 27.5 million MT in 2Q FY25. The cargo handling volume based on customer composition in the first half of FY2011 was 52:48 for JSW Group and third-party customers, compared to 60:40 in FY2014. This sector is very important as it contributes around 75% of the company’s revenue. Although the company has a strong primary customer in JSW Group, its third-party cargo handling grew a solid 48% over the same schedule, boding well for the long term.
Recently acquired assets (PNP Port in Maharashtra and Liquid Terminal in UAE) contributed approximately 66% of the cargo throughput growth. Increased utilization of existing ports and coal terminals at Mangalore, Paradip and Ennore also boosted growth.
Latest information on capital investment
During the quarter, the company received a letter of intent (LOI) for Mulve Port, a greenfield port in Maharashtra. The port (with an estimated capacity of 33 tonnes) will be an all-weather multi-cargo port with strategic connectivity to major road and rail routes such as National Highway 8 and the Delhi-Mumbai Main Railway. Brownfield capacity expansion of 15 tonnes at Jaigarh port and 21 tonnes at Dharamtal port was also approved during the quarter.
Navkar Corporation is an acquisition that was approved and initiated in the first quarter of 2025, completed in the second quarter, and integration is ongoing. Navkar primarily operates in the logistics sector, specializing in container cargo stations and inland container depots that serve as hubs for handling and temporary storage of export cargo. With this acquisition, JSW Infra will support the transition beyond port operations to inland logistics, enabling end-to-end cargo handling along with last-mile connectivity, expanding its portfolio of services and expanding the portfolio of services not only for JSW Infra but also for the JSW Group. Provides potential synergy with the whole.
outlook
JSW Infra is India’s second largest commercial port operator in terms of cargo handling capacity, with an existing capacity of 170 MT. Adani Ports leads the sector with a capacity of 663 MT. With 108 tonnes of approved capital projects and an additional up to 63 tonnes under consideration, JSW Infrastructure has set out plans to reach a total production capacity of 400 tonnes by FY30.
While the second quarter is typically a seasonally slow quarter, JSW Infra’s performance was a positive surprise, outpacing Adani Ports’ 10 per cent cargo growth. Cargo growth in the second quarter was surprisingly positive, contrary to expectations, but the outlook for the full year was revised downward. At the beginning of the fiscal year, the guidance for cargo growth was set at 10% to 12% for fiscal 2016, but this was revised to 10%, the lower limit of the guidance. Management noted that full-year cargo growth will be impacted by brownfield capacity expansion activities at existing ports.
The company also boasts a strong balance sheet and net cash of approximately Rs 87 million, making it well-positioned to capitalize on attractive opportunities for inorganic growth. Compared to its peers, Adani Ports has twice the net debt to TTM EBITDA, while Gujarat Pipavav is debt-free.
JSW Infrastructure’s stock is trading at a one-year forward P/E ratio of 48.1 times, making it expensive compared to peers Adani Ports’ 28.3 times and Gujarat Pipavav Ports’ 19.7 times. From an EV/revenue perspective, JSW Infrastructure also trades at a premium of 16.6x to 12.5x over Adani Ports and 8.3x over Pipavav Port in Gujarat.
