JSW Infra's rail deal is EPS accretive, accelerate logistics vision: Nuvama

The transaction gives JSW Infra an immediate foothold in India's rail logistics ecosystem and materially strengthens its plan to evolve into a multi-modal logistics platform

JSW Infrastructure has moved decisively to deepen its logistics franchise with the acquisition of JSW Rail, JSW Minerals Rail Logistics and JSW South Rail for an enterprise value (EV) of ₹1,210 crore, a deal Nuvama Institutional Equities sees as strategically important for the company’s long-term growth and earnings profile.

 

According to Nuvama, the transaction gives JSW Infra an immediate, hard-to-replicate foothold in India’s regulated rail logistics ecosystem and materially strengthens its plan to evolve from a pure port operator into a multi-modal logistics platform. The brokerage retains its ‘Buy’ rating on JSW Infra stock with a December 2026 target price of ₹360, valuing the stock at 22x Dec-27E enterprise value to Earnings before interest, tax, depreciation and amortisation (EV/Ebitda). At current levels, JSW Infra trades at 20.7x FY27E EV/Ebitda. Nuvama has not yet factored the acquisition into its estimates, pending deal closure and shareholder approval.

Direct rail play with scarce GPWIS, LSFTO licences

Nuvama notes that the acquisition is strategically significant because it instantly plugs JSW Infra into the General Purpose Wagon Investment Scheme (GPWIS) and Liberalised Special Freight Train Operator (LSFTO) regimes, at a time when Indian Railways has extended a moratorium on new GPWIS licences until February 2027. That moratorium effectively shuts the door on new entrants, making existing approvals a high-entry-barrier asset.

 

By buying JSW Rail, JSW Minerals Rail Logistics and JSW South Rail, JSW Infra acquires an operational rail logistics platform with 21 rakes in service, expected to reach 25 by March 2026. This gives the company a ready, compliant and scalable rail base that dovetails with its existing port, container and bulk/slurry logistics businesses and strengthens its control over the full “port-to-plant” logistics chain.  ALSO READ | Biocon-BBL merger positioned to add value, says Nuvama; retains 'Buy' call

Financially attractive, EPS accretive from day one

From a financial standpoint, Nuvama calls the transaction “value-accretive and EPS positive.” The enterprise value of ₹1,210 crore includes an equity component of ₹670 crore, with the balance comprising existing debt and liabilities. Crucially, the deal is being funded entirely from JSW Infra’s current balance sheet, without any equity dilution.

 

The acquired companies already generate healthy profits: JSW Rail and JSW Minerals Rail Logistics together posted revenue of over ₹127 crore and profit after tax (PAT) of more than ₹21 crore. Management expects the combined rail platform to deliver around ₹150 crore of annualised Ebitda by FY27, implying a reasonable EV/Ebitda multiple of 8.1x. Nuvama adds that projected PAT of about ₹60 crore in FY27 and ₹90 crore in FY28 translates into implied P/E multiples of 11x and 7.5x, respectively, making the acquisition earnings accretive from the first year. Long-term volume contracts from JSW Steel, Bhushan Power & Steel (BPSL) and other group entities provide visibility and stability of cash flows.  ALSO READ | Nuvama upgrades Suzlon to 'Buy' as wind outlook improves, capacity ramps up

Scaling rail to support JSW Infra’s FY30 logistics ambition

Strategically, the acquisition is central to JSW Infra’s ambition of building a large, integrated logistics business. Nuvama highlights that the deal allows JSW Infra to scale its rail fleet from 25 rakes immediately post-acquisition to 45 by FY27, and further to around 110 rakes by FY30. This rail capacity, when combined with its existing port and coastal assets, significantly enhances the company’s ability to offer end-to-end solutions to core customers in steel and other bulk sectors.

 

Integrated port-rail operations at locations such as Paradip and Goa are expected to create meaningful operating synergies—better turnaround times, lower handling and evacuation costs, and improved service reliability for customers. This, in turn, should support JSW Infra’s broader goal of transforming into a multi-modal logistics platform and contribute materially to its stated target of achieving around ₹8,000 crore in logistics revenue by FY30.

 

In Nuvama’s view, the acquisition is not just a bolt-on deal but a strategic building block that tightens JSW Infra’s grip on key logistics corridors, solidifies its role within the JSW Group’s supply chain and raises competitive barriers for peers over the medium term.  Disclaimer: View and outlook shared on the stock belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.