JSW Infra Q4 Results Review - Robust Quarter Led By Higher Third-Party Volumes; Outlook Bright: Motilal Oswal

Motilal Oswal Report

JSW Infrastructure Ltd. reported a revenue growth of 20% YoY to Rs 10.9 billion (12% above our estimate) in Q4 FY24. The company handled cargo volumes of 29.3 metric million tonne (+9% YoY) in Q4. The share of third-party cargo increased to 46% in Q4 FY24 from 37% in Q4 FY23.

Ebitda margin came in at 53% versus our estimate of 52.7% (up 150 basis point YoY, up 200 bp QoQ). Ebitda grew 23% YoY to Rs 5.8 billion, backed by increased cargo volumes. Adjusted profit after tax increased 7% YoY to Rs 3.7 billion (our estimate Rs 3.2 billion).

During FY24, JSW Infra reported revenue of Rs 37.6 billion (+18% YoY), Ebitda of ~Rs 19.6 billion (+21% YoY), Ebitda margins of 52.2%, and adjusted profit after tax of Rs 11.9 billion (+22% YoY). Cargo volume handled in FY24 stood at 106.5 mmt versus 92.8 mmt in FY23. Third-party cargo made up 40% of total cargo volumes handled in FY24, while JSW Group customers made up 60% of total cargo in FY24.

Q4 performance was better than our expectation, largely driven by higher volume from third-party customers. JSW Infra is leveraging its strong balance sheet to explore both organic and inorganic growth opportunities, aiming to enhance its market presence. The company targets to increase its capacity to 258 mmt/400 mmt by 2027/2030 (170 mmt currently). To achieve this goal, the company has outlined a capex plan of Rs 300 billion over the next six years.

As utilisation and volumes continue to ramp up, we expect strong growth to continue ahead. We believe JSW Infra would continue to gain market share and grow faster than the market for the next few years. Capacity addition plans would allow it to capitalize on the opportunity in the ports logistics space.

We largely retain our estimates and expect a compound annual growth rate of 15%/23%/27%/ 30% in volume/revenue/Ebitda/PAT over FY24-26. We maintain our Buy rating with a target price of Rs 300 (based on 18 times FY26E enterprise value/Ebitda).

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