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Resilient quarter; logistics to drive future growth

JSW Infrastructure (JSWINFRA) reported a resilient inline Q1FY27 operating performance, aided by robust growth in India cargo volumes (excluding Fujairah), strong performance at Jaigarh and Dharamtar, and continued ramp-up in the logistics business. Consolidated cargo volumes grew 5.5% YoY to 31mmt despite temporary disruption at Fujairah, which was partly offset by improved domestic throughput. Ports NSR remained resilient, supported by favourable cargo mix and higher contribution from own ports; while logistics continued to witness strong growth led by improving Navkar utilization and higher contribution from the rail rakes business. However, the temporary shutdown at Fujairah impacted ports EBITDA by ~INR0.7bn during the quarter. Commercial operations commenced at the Arakkonam GCT during the quarter, while the company also secured EC & DFC rail connectivity approval for Murbe Port, marking key milestones for its long-term growth pipeline

Management expects FY27 cargo volume/EBITDA of 127mmt/ INR30bn, while maintaining its long-term target of scaling port capacity to 300/400mtpa by FY28/30 respectively through brownfield expansions, greenfield projects and selective acquisitions. While the recent geopolitical conflict temporarily impacted Fujairah operations and global trade flows, management expects domestic cargo growth and increasing contribution from newly commissioned assets to largely offset the disruption. Oman port investment would also be fast-tracked as massive capex is being planned by countries over coastline which is away from the Strait of Hormuz. The logistics business is expected to remain a key growth driver, supported by ramp-up in rail rakes, Navkar and multimodal infrastructure; while improving capacity utilization across ports and logistics assets is expected to drive operating leverage and support long-term EBITDA growth. We raise our FY28 estimates by 2% and expect JSWINFRA to deliver strong 33% EBITDA CAGR over FY26-28E. The stock is trading at EV of 19.3x FY28E EBITDA. Maintain ‘Accumulate’ with revised TP of INR361 (earlier INR354) valuing at same 20x EV of Mar’28E EBITDA.

Revenue aided by strong logistics business:

Cons. Revenue grew 18% YoY to INR14.4bn (-5% QoQ; PLe of INR14bn), led by strong growth in the logistics business. Port ops revenue grew 11% YoY to INR12bn (-6.7% QoQ; PLe of INR11.86bn) while cargo volumes grew 5.4% YoY to 31mt (-1.9% QoQ; PLe of 31mt). Third-party cargo share declined to 48% in Q1 (vs. 52% in Q1FY26) as anchor customer volumes improved at Jaigarh Port. Volume growth was driven by Jaigarh, Dharamtar, South West Port and Ennore Bulk Terminal, partly offset by lower volumes at Fujairah. Ports ops revenue per ton grew 5.5% QoQ to INR390 (-4.9% YoY; PLe of INR382/t), led by higher volumes from own ports. Ports ops EBIT/t declined 2.5% YoY to INR149 due to higher operating costs.

Strong domestic momentum in Logistics:

Navkar delivered 38% YoY revenue growth to INR1.9bn (-5% QoQ; PLe of INR1.8bn), aided by robust 40% YoY growth in domestic cargo, which increased to 385,000 metric tonnes, while EXIM cargo grew 2% YoY to 83,000 TEUs. Logistics segment revenue grew 72% YoY to INR2.37bn (+4% QoQ), led by INR0.43bn contribution from the Rail Rakes business.

EBITDA aided by higher contribution from own ports:

EBITDA increased 16% YoY to INR6.7bn (-12% QoQ; PLe of INR6.59bn), aided by strong volume growth at Jaigarh (+27% YoY to 5.4mmt), Dharamtar (+17% YoY to 6.4mmt) and South West Port (+25% YoY to 2.35mmt), partly offset by higher operating expenses. PAT declined 10% YoY to INR3.4bn (flat QoQ; PLe of INR3.6bn)

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