Business Standard

JSW Infrastructure eyes end-to-end logistics play: CEO Arun Maheshwari

Inland logistics present great opportunity, says CEO Arun Maheshwari, after acquiring Navkar

Arun Maheshwari, JSW Infrastructure

Arun Maheshwari, JSW Infrastructure

Dhruvaksh Saha New Delhi

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With a healthy ports business and near-double-digit growth in cargo, JSW Infrastructure, the ports arm of the JSW Group, is looking to become a key player in inland logistics with an aggressive foray into port connectivity projects.

“We have grown our third-party business more than 50 per cent. So now, what next? For any port player, the natural expansion is to have connectivity projects, which bring more value-added services for customers. The way the Indian economy is growing, container freight stations (CFSs), inland container depots (ICDs), and private freight terminals (PFTs) will make great sense in the days to come,” JSW Infrastructure joint managing director (joint MD) and chief executive officer (CEO) Arun Maheshwari told Business Standard.

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On June 27, the company announced that it acquired a majority stake in logistics firm Navkar Corporation for an enterprise value of Rs 1,644 crore. The deal is expected to materialise by the third quarter of 2024-25.

The acquisition will allow the port player control several inland assets, such as three CFSs, two Gati-Shakti Cargo terminals, and one ICD.

“We will grow our portfolio in this area with the same enthusiasm as what we do in our port businesses,” he added.

Maheshwari’s preferred geographies for expansion would largely be northern and central India.

This is where the hinterland and port connectivity play a crucial role.

“But if we have to bid somewhere in a strategic location, wherein I see anchor customers, I don’t mind bidding and thereafter building up the volume on that, so that it doesn't stress the balance sheet,” he said.

JSW Infra also won a Gati-Shakti cargo terminal in Chennai earlier this quarter, which will entail a capital expenditure (capex) of Rs 150 crore.

The company recently announced its results for the first quarter of 2024-25. It reported a 15 per cent rise in revenue from operations to Rs 1,010 crore, but saw a 9 per cent drop in its net profit. The company, in its investor concall, said this was on account of a foreign exchange adjustment.

“The cargo handled in the first quarter has grown by 9 per cent year-on-year (Y-o-Y). We had a shutdown with one of our anchor customers (JSW Steel Dolvi Plant), which had an impact of about 2.7-2.8 million tonnes (mt) on cargo. It was a planned shutdown, and had it not been there, the growth would have been 18 per cent. Our terminals are doing very well and we had two acquisitions, which aided cargo volumes,” the CEO said.

Third-party cargo handled in the first quarter was 50 per cent of the company’s total volumes, and grew by 48 per cent as compared to last financial year (2023-24).

The company’s third-party cargo is a key monitoring factor.

For 17 years, JSW’s ports business was an arm to support the cargo needs of the conglomerate’s various manufacturing businesses.

With a newfound purpose in 2019 and going public in 2023, the company is looking to go big in the commercial cargo segment. For this, it would need to significantly expand its cargo volumes from non-JSW sources.

Maheshwari expects third-party cargo to be around 45 per cent by the end of this financial year.

India’s second-largest port player is also looking at mega port opportunities, such as the Vadhavan Port in Dahanu, Maharashtra. This port was recently approved by the Union Cabinet with a Rs 76,000-crore outlay.

Maheshwari said the company is looking at the project closely, and will be keen to participate in it.

JSW Infra is also looking at several overseas project proposals and may have some developments on that front soon. Currently, it operates a liquid cargo terminal in the UAE.

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First Published: Jul 22 2024 | 4:34 PM IST

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