Target: ₹250

CMP: ₹208.30

JSW Infrastructure, part of the ₹23 billion JSW Group, is India’s 2nd largest commercial port operator with 158 tpa (mnt) handling capacity and fastest-growing port (basis volume CAGR in FY20-23).

In addition to operating nine ports/terminals in India, JSWIL operates two port terminals under O&M arrangement and recently acquired a liquid storage terminal in Fujairah (UAE). This coupled with acquisition of three terminals in FY21, bid for three major port terminal privatisation tenders and recent announcement on greenfield port (Keni) and potential greenfield port in Jatadhar (Odisha) demonstrates its intent to achieve its guidance of sustaining past volume growth performance (over 20 per cent CAGR since inception) over the long term, in our view.

With a strong balance sheet (Net Debt/EBITDA<1.6x in FY23), OCF generation and the recent IPO (₹2,800 crore; promoters still own 85.6 per cent of the company), we estimate that JSWIL has headroom to borrow up to an additional ₹8,000 crore, if required, to fund its growth strategy and still be well within its guidance (max 2.5x debt/EBITDA on sustainable basis).

Key risks: Any material downward price revision for group customers, and sharp depreciation of INR against USD.

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