JSW Infra Jumps 5% On Bullish Outlook From Jefferies, Fitch

JSW Infrastructure gained nearly 5% on Tuesday as global brokerage Jefferies and Fitch Ratings expressed optimism over the firm’s outlook.

What Happened: Fitch affirmed its long-term foreign-currency issuer default rating for JSW Infrastructure at “BB+” and held a “positive” outlook for the firm.

The agency’s “positive” outlook is centred on JSW Infra’s plans to boost its capacity to 400 million tonnes per annum by March 2030, up from 170 million tonnes currently.

This will increase capital expenditures to around ₹13,000 crore from FY25 to FY27, up from a previously estimated ₹4,500 crore, Fitch said. If capital expenditures exceed expectations, it could strain leverage and reduce the firm’s rating flexibility, potentially leading to a downgrade of the outlook to “stable” if no new equity is issued, it added.

The company’s expected maintenance of a 40% third-party cargo mix, driven by strong domestic and export demand also contributed to Fitch’s outlook. The rating counts on JSW Infra’s diverse port locations, reasonable tariffs and long-term contracts, which account for about 30% of revenue.

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The company is projected to achieve 10% annual growth from FY25 to FY27 and is comparable to Adani Ports and Special Economic Zone Limited, the ratings agency said.

Brokerage Views: Jefferies also initiated coverage on the stock with a “buy” rating, propping up the company’s shares. The brokerage firm has set a target price of ₹375 for JSW Infra, projecting a 21% increase in the stock’s value.

JSW Infra plans to expand its capacity 2.4 times by the financial year 2030 and has recently entered the logistics sector with the acquisition of Navkar Logistics. Jefferies noted that, due to its smaller base, growth is expected to exceed 20% from current levels.

The brokerage had a positive outlook for India’s overall private sector ports, anticipating strong growth. It expects these ports to benefit from increased market share, acquisitions, and expansions, which should drive double-digit growth in volume and EBITDA.

Jefferies projects that all-India port cargo will grow at a 6% annually from FY24 to FY30, slightly above the 5% annual growth seen over the past decade. Additionally, port capacity is expected to expand by 1.3 to 1.4 times during this period.

Price Action: JSW Infrastructure was trading 4.48% higher at ₹323 on Tuesday.

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