Buy JSW Infrastructure Ltd for the Target Rs 360 by Motilal Oswal Financial Services Ltd
Expansion projects underway; growth outlook remains strong
* All-India major port volumes grew 2.5% YoY in April’26 and ~7% in FY26. The volume growth in April was led by healthy traction in containers, while petroleum and coal, which account for a major market share of cargo, registered a negative growth rate of ~5% and 1%, respectively. Iron ore volumes remained subdued in FY26, growing only 1% in FY26 and declining by ~2% in Apr’26.
* JSW Infrastructure (JSWINFRA) reported modest volume growth of ~4% in FY26, impacted by subdued throughput at the Paradip iron ore terminals and temporary disruptions during 4QFY26 arising from the West Asia crisis, which led to cargo deferments across Indian ports. However, this weakness was partly offset by healthy operations at SW Port, Dharamtar Port, and Jaigarh Port, along with incremental contributions from interim operations at Tuticorin and the JNPA liquid terminal. Management highlighted that volume traction improved meaningfully from Apr’26 onward and expects operations to normalize gradually over the coming quarters.
* The company expects operations at the Fujairah terminal to normalize by 2QFY27. Additionally, it has recognized a provision of INR680m toward losses related to three oil tankers. However, the company highlighted that adequate insurance coverage is in place to offset these damages. Operations are expected to progressively normalize, with ~50% of capacity likely to resume shortly, subject to regional stability.
* With a balanced east-west coast presence and expanding inland logistics, JSWINFRA is well-placed to benefit from India’s push for multimodal integration and port-led industrial growth. By the start of FY28, major port expansions are expected to be completed, and the logistics business is likely to scale up sharply. During FY26-28, we estimate a CAGR of 19%/39%/34%/35% in volume/revenue/EBITDA/APAT. We reiterate our BUY rating with a TP of INR360 (premised on 17x FY28 EV/EBITDA).
Strategic expansion across ports to drive structural growth
* JSWINFRA successfully commissioned its liquid terminal at JNPA in Feb’26, increasing its total port capacity from 177mtpa to 183mtpa. Moreover, it received approval for interim operations at the SMP Kolkata container terminal.
* The company is strategically positioned to capitalize on India’s growing port infrastructure needs, with a goal to expand its port capacity to 400mtpa by FY30 from 183mtpa as of Mar’26.
* Strategic projects such as Keni Port in Karnataka, Jatadhar Port in Odisha, and the Odisha slurry pipeline represent transformative infrastructure plays, enhancing hinterland connectivity and creating long-term growth corridors. Execution across projects remains on track, backed by strong project management capabilities and group-level synergies.
* Projects under execution total 117.1mtpa, excluding Oman port (27mtpa), the Kolkata Container Terminal (6.3mtpa), and Tuticorin (7mtpa), with completion expected during FY26-28. The company is also undertaking strategic capacity upgrades at Mangalore, Southwest Port, Dharamtar, and Jaigarh, targeting combined expansions of over 40mtpa.
Valuation and view
* In FY26, cargo volume growth remained modest at ~4%, affected by the West Asia crisis and subdued volume in the Paradip iron ore terminal. Nevertheless, JSWINFRA’s long-term vision includes expanding its port capacity to 400mtpa by FY30 and developing a logistics platform, aimed at generating INR80b in revenue and a 25% EBITDA margin. Backed by aggressive yet disciplined capex, customer diversification, and multimodal infrastructure expansion, JSWINFRA remains well-positioned for structural growth across India’s maritime and logistics value chain.
* We expect JSWINFRA to strengthen its market dominance, leading to a 19% volume CAGR over FY26-28. This, along with a sharp rise in logistics revenue, is expected to drive a 39% CAGR in revenue and a 34% CAGR in EBITDA over the same period. We reiterate our BUY rating on the stock with a TP of INR360 (based on 17x FY28E EV/EBITDA).
For More Research Reports : Click Here
For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412
