Strong 30% EBITDA CAGR over FY25-28E
Although JSW Infrastructure’s (JSWINFRA IN) near-term port volume has been volatile due to slow iron ore exports, port EBITDA has been stable led by tariff hike. With portfolio shifting to greenfield private ports, cargo diversification to containers, and commissioning of the Oman Port (high-margin potential) should drive profitability. Logistics business at Navkar Corporation is scaling up steadily. With the acquisition of railway rakes, new capacity addition will drive multifold growth. We expect a 30% EBITDA CAGR in FY25-28E, in-line with FY28 guidance (targeting port margin at 54%, logistics margins at 19%), led by a major reset in the business (refer FY28 major reset, 3x EBITDA by FY30, dated 14 December 2025). We maintain our estimates – in FY25-28E, expect revenue CAGR of 29% and earnings CAGR of 22% (assumed growth funded via debt). Our DCF based valuation implies FY28E EV/EBITDA of 17x for consolidated business vs our earlier ports & logistics segments’ average target multiple of 18x on FY27E. Reiterate Buy.
Q3 results in-line: Q3 consolidated revenue rose 14% YoY to INR 13.5bn, led by ports revenue (up 10%) and logistics revenue (up 44% due to acquisition of Navkar Corp.). EBITDA grew 10% YoY to INR 6.4bn, though margin softened to ~47.7% (from ~49.6%) due to higher contribution from terminals and expansion in logistics network. Adjusted PAT rose 11% YoY to INR 3.7bn, supported by operating growth. Reported PAT, however, was hit by a one-time provision of INR 72.4mn due to change in Labor Law code.
Ports – Volume growth of 5-6% in FY26: JSWINFRA reported an 8% YoY rise in port volumes to 31.7mt, led by healthy performance at captive ports of South-West and Dharamtar, contributions from interim operations at Tuticorin and JNPA liquid terminals and gradual recovery in iron ore volumes at Paradip due to improved demand. Third-party cargo volumes rose 10% YoY to 15.7mt, increasing their share to 50% of the total throughput (versus 49% YoY). Guided for 5-6% volume growth in FY26 and FY27. Port EBITDA margin moderated ~110bps YoY to 52.5%, impacted by one-time costs at some ports and higher share from terminals.
Logistics – Strong scale-up: Logistics revenue increased to INR 1.9bn in Q3FY26, driven by higher domestic and EXIM cargo volumes. EBITDA improved to INR 332mn with margins expanding to ~18%, reflecting operating leverage. Domestic volume led the performance with 45% growth and EXIM grew at 19% YoY, supported by higher utilization at ICDs and CFS facilities. Network strength improved with 22 operational rail rakes added and LoA for the Somathane Gati Shakti terminal, enhancing long-term growth visibility.
Maintain Buy with a higher TP of INR 393: We reiterate our positive stance given strong long-term growth visibility and earnings acceleration from FY28, driven by commissioning of a new port, scale-up in logistics and contribution from inorganic growth. Strong balance sheet, healthy cashflow and low leverage should prop growth capex. Post recent correction in the stock price, we expect good upside from the current levels. We value JSWINFRA on FY25-35E DCF, implying FY28E EV/EBITDA of 17x. We assume a WACC of 10%, terminal growth of 5%, FY28E-35E revenue CAGR of 14% and EBITDA CAGR of 15%. Maintain Buy with a higher TP of INR 393 from INR 362.
