JSW Infra gains 7% in 2 days, stock zooms 50% from Feb low; here's why

JSW Infra said it has completed the acquisition of the slurry pipeline business from JSW Utkal Steel (a wholly-owned subsidiary of JSW Steel) through a slump sale

Shares of JSW Infrastructure were trading 4 per cent higher at ₹327.55 on the BSE in Thursday’s intra-day trade amid heavy volumes. 

 

In the past two days, the stock has rallied 7 per cent after the company said it has completed the acquisition of the slurry pipeline business from JSW Utkal Steel (a wholly-owned subsidiary of JSW Steel) through a slump sale. The pipeline is for transporting iron ore from Nuagaon mines to Jagatsinghpur in Odisha. The acquisition was completed for a consideration of ₹1,617 crore. 

 

JSW Infrastructure has also entered into a 20-year "take or pay" agreement with JSW Steel for the transportation of iron ore slurry through the pipeline. This move is significant for the company's infrastructure assets and its long-term revenue stream from transportation services, according to ICICI Securities.

 

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On July 19, 2024, JSW Infrastructure’s board had approved the takeover of 30 million tonnes per annum (MTPA) “Under Development Slurry Pipeline Project” from JSW Utkal Steel and to enter into a 20-year long-term take-or-pay agreement for using the pipeline to transport iron ore. The project's development is scheduled for completion in early 2027 and commercial operations are expected to commence in April 2027, the company said. 

 

According to JSW Infrastructure, the port connectivity project aligns with the company’s growth strategy, offering robust annual cash flows and lucrative mid-teens Project IRR (Internal Rate of Return). Moreover, the project offers a sustainable solution for transporting iron ore underground, significantly reducing carbon emissions and providing substantial environmental benefits.

 

JSW Infrastructure, a part of the JSW Group, is the second largest private commercial port operator in India. It currently operates ten port concessions strategically located on the west and east coasts of India. Its international presence includes a Liquid tank storage terminal of 465,000 cubic meters in Fujairah, UAE.

 

With the gains of the past two days, the stock price of JSW Infrastructure has zoomed 50 per cent from its 52-week low level of ₹218.10 touched on February 18, 2025. The stock had hit a 52-week high of ₹361 on July 4, 2024. 

 

With a focus on expanding capacity, improving the third-party mix in overall cargo, and improving utilisation levels at existing ports and terminals, Motilal Oswal Financial Services (MOFSL) expects its volume growth trajectory to remain intact. JSW Infrastructure expects to end FY25 with 10 per cent volume growth.

 

Leveraging its strong balance sheet, JSW Infrastructure aims to pursue organic and inorganic growth opportunities, strengthen its market presence, and expand its capacity to 400mmt by 2030 from 170mmt currently. Considering stable growth levers at its existing ports and terminals, a higher share of third-party customers, steady cargo volume from JSW Group companies, and an expanding portfolio, the brokerage firm expects JSW Infrastructure to strengthen its market dominance, leading to a 14 per cent volume compound annual growth rate (CAGR) over FY24-27E. This should drive a 21 per cent CAGR in revenue and a 23 per cent CAGR in earnings before interest, tax, depreciation and amortisation (Ebitda) over the same period, MOFSL said.