Add JSW Infrastructure ltd For Target Rs. 325 By Emkay Global Financial Services Ltd
JSW Infra’s Q4FY26 print was ahead of street’s and our estimates, with revenue/EBITDA growing 19%/20% YoY on the back of steep ramp-up in the logistics segment. Ports revenue grew 12% YoY, primarily driven by improvement in realization, as volume growth was muted (+2% YoY) owing to the ongoing ME crisis. With consolidation of the rail business in Feb-26 and uptick in the volume trajectory at Navkar, the logistics segment witnessed a sharp uptick in Q4. The management reaffirmed its FY27/28 guidance, implying revenue/EBITDA CAGR of 42%/39% during FY26-28. JSW Infra has maintained the timelines of commissioning upcoming projects, suggesting minimal execution risks, in line with our thesis. Factoring in the rail rakes acquisition, we increase FY27E/28E EBITDA by 6%/7%, respectively, resulting in ~8% increase in Mar-27E TP to Rs325 from Rs300; maintain ADD.
Logistics ramp-up continues; margin expands
Q4 overall revenue grew 19% YoY to Rs15.2bn (+3/2% vs street’s/our estimates), with growth primarily led by the non-ports (+74% YoY) segments. The ports division grew 12% YoY, mainly driven by 10% increase in realization due to increase in rates in Goa and Mangaluru container ports and a take-or-pay revenue at Jaigarh port recurring in Q4 every year (to the tune of Rs750mn). However, volumes were impacted by the revenue decline at the Fujairah terminal due to the ME conflict. EBITDA margin for ports expanded marginally YoY to 54.5%. The non-ports business delivered exceptional growth of 74% YoY, with EBITDA margin expanding by ~1,700bps YoY to 28.2%. Overall EBITDA grew 20% YoY, with EBITDA margin expanding by 58bps to 50.5%. PAT however declined 18% YoY to Rs4.2bn on account of a 16x increase in interest expense, while adj PAT grew 15% YoY to Rs5.3bn. Net debt stood at Rs31bn as of Mar-26 (Dec-25: Rs18.9bn). The company declared a dividend of Rs0.90/sh.
Expansion on track; reiterate ADD
The management indicated that project pipeline execution is on track. The 302-km ironore slurry pipeline is ~82% complete on welding (247km) and 78% complete on pipeline lowering (235km), on track for completion by Mar-27. At Jatadhar Port, pile foundation work is 80% complete and 7 cubic meters of dredging is complete, with full project completion also targeted by Mar-27. At Jaigarh Port, civil works for berths are complete, with ~60% dredging done. Dharamtar Port berth construction is progressing well. The Oman port concession agreement remains under negotiation, with the management expressing strategic optimism about ME ports outside the Strait of Hormuz. The Gati Shakti cargo terminal in Arakkonam was commissioned and received commercial operations’ approval in Apr-26. The company placed orders for 40 additional rakes in Apr26. With aggressive expansion plans in the pipeline, the management forecasts FY26-28 revenue CAGR of 31%/98% and EBITDA CAGR of 32%/122% for ports/non-ports business. We reiterate ADD. Key risks: Execution delays and slower-than-expected rampup in group companies
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