JSW Infra Gets Target Price Upgrade From Motilal Oswal As It Sees Multiple Tailwinds

JSW Infrastructure's share price has got its target price raised by Motilal Oswal as the brokerage sees multiple tailwinds for growth including capacity expansion, expectations of a higher market share, and strong volume growth trajectory.

Reiterating its 'buy' call, the brokerage now has a target price of Rs 375 for the stock, implying an upside of 21%. Its previous target was Rs 350.

"Considering stable growth levers at its existing ports and terminals, a higher share of third-party customers, sticky cargo volumes from JSW group companies, and an expanding portfolio, we expect JSW Infra to strengthen its market dominance, leading to a 14% volume CAGR (compound annual growth rate) over FY24-27," the brokerage said. "This should drive a 19% CAGR in revenue and a 20% CAGR in EBITDA over the same period."

Motilal Oswal also noted that leveraging its strong balance sheet, the company aims to pursue organic and inorganic growth opportunities, strengthen its market presence, and expand its capacity to 400 million metric tonnes by 2030, up from the current capacity of 170 mmt. "As utilization and volumes continue to ramp up, we expect strong growth to continue," it said.

According to the brokerage, the company is the second-largest private port operator with expanding capacity. It noted that its cargo volumes more than tripled to 106.5 mmt in FY24 (55.3 in 1HFY25) from 35.4 mmt in FY19. "This represents a 25% CAGR, far outpacing the industry growth rate at 4% CAGR during the same period," it said.

On the downside, the brokerage noted slowdown in domestic and global trade as risks to its call.

The scrip rose as much as 2.4% to Rs 317 apiece. It pared gains to trade 1.1% higher at Rs 313.05 apiece, as of 9:41 a.m. This compares to a 0.35% advance in the NSE Nifty 50 Index.

It has risen 50.53% on a year-to-date basis. Total traded volume so far in the day stood at 0.22 times its 30-day average. The relative strength index was at 48.2.

Out of 14 analysts tracking the company, 11 maintain a 'buy' rating, none recommend a 'hold,' and three suggest 'sell,' according to Bloomberg data.