JSW Infra zooms 5% as Fitch revises rating to' BB+' with outlook 'positive'

JSW Infrastructure share price surged 5 per cent at Rs 324.85 per share on the BSE in Monday’s intraday deals. This came after the global credit rating agency, Fitch Ratings revised its outlook to ‘Positive’ for the company and affirmed its rating at 'BB+'. 

A BB+ credit rating from Fitch indicates that an entity has slightly lower credit risk compared to a BB rating but remains vulnerable to economic conditions or other changes.

At 12:00 PM; the share price of JSW infrastructure was trading 4.41 per cent higher at Rs 322.90 per share on the BSE. In comparison, the BSE Sensex rose 0.12 per cent at 81798 levels.

Fitch Ratings noted that the 'positive outlook' for JSW Infrastructure Ltd. (JSWIL) reflects expectations that the company’s leverage (gross debt/EBITDA) will remain below upgrade sensitivity limits, despite increased investment plans.

The outlook is also supported by the expectation that JSWIL will maintain its third-party cargo mix at around 40 per cent in the medium term. The rating is underpinned by JSWIL's geographically diversified port locations, reasonable tariffs, and long-term take-or-pay contracts, which contribute approximately 30 per cent of total revenue.

However, the rating is tempered by high cargo exposure to coal and iron ore, as well as customer concentration risk, with JSW Steel contributing over half of JSWIL’s cargo volume. Despite this, JSWIL’s credit assessment is independent of JSW Steel's rating.

JSW Infrastructure, India's second-largest private port operator by cargo handled, reported a nearly 9 per cent decline in first-quarter profit on Thursday due to higher expenses. Its consolidated net profit dropped to Rs 292 crore for the quarter ended June 30, down from Rs 321 crore in the same period last year. 

Despite a 9 per cent increase in cargo volume to 27.8 million tons and a 15 per cent rise in revenue from operations, total expenses surged 41 per cent, with operational costs rising 23 per cent. 

JSW Infrastructure, part of the JSW Group, operates 10 ports across India and recently acquired a majority stake in Navkar Corporation through its unit JSW Port Logistics, marking its entry into the logistics sector.

The shares of the company are presently trading at a price to earnings multiple of 203.89  times with an earning per share of Rs 1.52. 

JSW Infrastructure is a port-related infrastructure firm in terms of installed cargo handling capacity and cargo volumes handled. It is the second-largest commercial port operator in India by cargo handling capacity. 

The company provides maritime services, including cargo handling, storage solutions, logistics services, and other value-added services, and is evolving into an end-to-end logistics solutions provider.