Steady project execution could lead to further upgrades for JSW Infra

Analysts see scope for further valuation gains as JSW Infrastructure executes a large expansion pipeline and targets strong revenue and EBITDA growth through FY28

JSW Infrastructure (JSW Infra) was the top gainer in the BSE 200 on Wednesday. A recent qualified institutional placement (QIP) raised ₹7,500 crore with 9 per cent equity dilution, while analysts upgraded valuations based on a recent greenfield asset with 30 million tonnes per annum (MTPA) capacity at Jatadhar Port, a container terminal with 20 MTPA capacity in Kolkata, and multiple projects under execution. Projections indicate that volumes could grow by around 50 per cent over the next decade.

 

The Q4FY26 performance was ahead of estimates, with revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) growing 19 per cent and 20 per cent year-on-year (Y-o-Y), respectively. Revenue grew 19 per cent Y-o-Y to ₹1,520 crore, with growth primarily led by non-port segments, which were up 74 per cent Y-o-Y. Port revenue grew 12 per cent Y-o-Y, driven by better realisation, despite only 2 per cent Y-o-Y volume growth.

 

In February this year, the rail business was consolidated. The integration of 25 rakes through an acquisition in February led to an additional ₹25 crore in EBITDA. A further 40 rakes are planned in FY27 and eventually 250 rakes by FY28.

 

The management reiterated its FY27 and FY28 guidance, which implies annual revenue growth of around 42 per cent and EBITDA growth of 39 per cent during FY26-FY28. JSW Infra said timelines for commissioning upcoming projects remain on schedule.

 

Volumes were impacted by a revenue decline at the Fujairah terminal due to the West Asia conflict. The conflict damaged three of 15 liquid storage tanks at Fujairah early in March this year. Management estimated the EBITDA impact at ₹32 crore.

 

The EBITDA margin for ports expanded marginally Y-o-Y to 54.5 per cent in Q4FY26. The non-port business saw EBITDA margin expand by 1,700 basis points Y-o-Y to 28.2 per cent. Overall EBITDA margin expanded by 58 basis points to 50.5 per cent. Net profit declined 18 per cent Y-o-Y to ₹420 crore, while adjusted net profit grew 15 per cent Y-o-Y to ₹530 crore. Net debt stood at ₹3,100 crore as of March 2026, up from ₹1,890 crore in December 2025. The company declared a dividend of ₹0.90 per share.

 

The 302-km iron-ore slurry pipeline is on track for completion by March 2027. At Jatadhar Port, full project completion is targeted by March 2027. At Jaigarh Port, civil works for berths are complete, with around 60 per cent dredging completed. Dharamtar Port berth construction is progressing well. The Oman port concession agreement remains under negotiation, with the management expressing optimism about West Asian ports outside the Strait of Hormuz. The Gati Shakti cargo terminal in Arakkonam was commissioned and received approval in April 2026. The company placed orders for 40 additional rakes in April this year.

 

The management guided for FY26-FY28 revenue growth of 31 per cent for ports and 98 per cent for non-port businesses, and EBITDA growth of 32 per cent for ports and 122 per cent for non-port businesses. Overall EBITDA guidance is ₹3,000 crore for FY27 and ₹5,000 crore for FY28.

 

The company believes it can sustain 25 per cent EBITDA growth even beyond FY30. Taken together with the Q4FY26 results, the guidance is notable given the Iran conflict and its impact on the Fujairah asset. If the non-West Asian projects are completed on schedule, the FY27 and FY28 guidance appears credible.

 

Guidance is for EBITDA of ₹8,000-10,000 crore by FY30 and potentially 25 per cent annual growth thereafter. Management pointed to growth levers beyond FY30, such as ramp-up at Keni due to the Vijayanagar steel plant expansion, Jatadhar with a potential Phase-II expansion linked to a 5 MTPA steel plant, and ramp-up at the Oman port. Capital expenditure beyond FY30 will be disciplined, with management targeting a post-tax project rate of return of 16 per cent for greenfield projects and 20-22 per cent for brownfield capex.

 

FY26 net debt of ₹3,100 crore remains within management's optimal gearing target of 2.5 times net debt-to-EBITDA. Capital expenditure of ₹16,500 crore, including ₹3,500 crore in logistics, is planned for FY27 and FY28. Internal accruals and another potential QIP to meet minimum free-float norms by March 2027 are expected to keep net debt-to-EBITDA well within 2.5 times.

 

Management said it may consider acquisitions in logistics and berth privatisation projects at major ports beyond the ₹39,000-crore capex plan announced for FY25-FY30. Assuming projects remain on schedule, the company could see further valuation upgrades since it is growing faster than Adani Ports and Special Economic Zone (APSEZ), which remains the industry benchmark.