ICICI Securities has reiterated its BUY recommendation for JSW Infrastructure (JSWIL) with an upgraded target price of Rs 345, reflecting a 17% upside from the current market price of Rs 294. Despite temporary volume challenges from core assets, JSWIL’s aggressive push into logistics and strategic greenfield expansions is expected to deliver robust growth. The company is executing a Rs 90 billion capex program over FY25–30, aiming to scale both port operations and its logistics division. With improving margins, new terminals going live, and efficient capital allocation, JSWIL is poised for sustainable shareholder value creation.

Growth Backed by Acquisitions and New Assets

JSWIL reported FY25 volumes at 117 million tonnes (mt), up 9% YoY, although growth from existing assets was muted due to subdued steel production and lower iron ore exports. Organic volumes stood at 103mt, while incremental throughput came from newly acquired terminals—Fujairah (7.3mt), PNP (5.5mt), JNPT (0.2mt), and Tuticorin (0.9mt).

Q4FY25 volumes rose 6% YoY to 31.2mt, highlighting JSWIL’s ability to offset stagnation at key locations such as Jaigarh and Dharamtar with output from new acquisitions. Cargo handled by third parties accounted for 50% of total Q4 cargo, up 360bps YoY, indicating reduced reliance on the JSW group and improved diversification.

Financial Performance Reflects Strategic Execution

Revenue for FY25 stood at Rs 44.8 billion (+19% YoY), with EBITDA at Rs 23.4 billion (+19% YoY). Excluding forex losses, adjusted EBITDA was Rs 24.1 billion, reflecting a margin of 54%.

Q4FY25 adjusted PAT rose 55% YoY to Rs 5.1 billion. A favorable mix of higher-margin terminals and volume ramp-up at newer sites contributed to improved profitability. Logistics revenues, though a smaller contributor at Rs 1.3 billion, are expected to grow at 15–20% annually from FY26.

Capex Program and Logistics Vision

JSWIL has earmarked Rs 90 billion in capex through FY30, with Rs 15 billion allocated in FY26 specifically for logistics. This will include expansions at Navkar, rake acquisitions, and the addition of 15–20 new Gati Shakti terminals.

The management aims to achieve Rs 80 billion in logistics revenue and Rs 20 billion in EBITDA by FY30. The roadmap includes capturing 15% of JSW Group’s logistics spend, converting port volumes to logistics earnings, and acquiring new third-party clients.

Terminal and Port-Level Diversification Strategy

The company's second phase of growth centers around asset diversification:

• Jaigarh and Dharamtar: Expansion aligned with group steel capacity ramp-up.
• Keni and Murbe (Greenfield Ports): Add cargo mix diversity and enhance margins.
• Jatadhar Port & Slurry Pipeline: Expected to tap into Odisha’s industrial base.
• Navkar Logistics: Offers asset-rich footprint with high expansion potential.

Quarterly Segment Performance

Logistics: The Next Big Value Driver

Navkar's expansion potential is central to JSWIL’s logistics strategy, with current capacity utilization at 80%. The company is also exploring acquisitions of DCFs and ICDs while leveraging group synergies in fleet and cargo handling.

Currently, logistics contributes Rs 170 million to EBITDA. However, a clear roadmap has been laid out to scale this segment to Rs 20 billion by FY30.

Balance Sheet and Valuation Outlook

Gross debt has declined to Rs 47 billion (from Rs 57 billion in Q3), with a cash balance of Rs 32 billion, yielding a net debt of just Rs 15 billion. The company’s balance sheet remains healthy and primed for capital deployment.

ICICI Securities values JSWIL at Rs 345 per share using a Sum-of-the-Parts (SoTP) methodology, factoring in contributions from existing operations, new ports, logistics, and terminals. Key value drivers include:

• Jaigarh and Dharamtar (Rs 178/share combined)
• Greenfield Ports – Keni, Murbe, and Jatadhar (Rs 40/share)
• Navkar and Slurry Pipeline logistics (Rs 51/share)
• New terminals JNPT and Tuticorin (Rs 17/share)

Risks and Investment Considerations

Delays in new port construction, land acquisition, or slowdowns in JSW Steel’s capacity expansion pose key downside risks. Additionally, any cyclical downturn in steel and iron ore exports may temporarily impact volumes.

Conclusion: Poised for High-Yield Growth

JSW Infrastructure’s transition from a port operator to a logistics powerhouse is taking shape. With strategic acquisitions, robust financials, and scalable infrastructure, the company is well-positioned to unlock long-term shareholder value. The logistics division offers a compelling growth lever, with margin-accretive assets like Fujairah already outperforming.

ICICI Securities maintains a BUY rating with a target price of Rs 345, reflecting both operational resilience and an ambitious growth blueprint. For investors seeking exposure to India’s expanding infrastructure and logistics landscape, JSWIL represents a high-conviction opportunity.