JSW Infrastructure’s Profit Jumps 46%: The Secret Revealed

Motilal Oswal maintains BUY rating for JSW Infrastructure

JSW Infrastructure’s Profit Jumps 46% Motilal Oswal is optimistic about JSW Infrastructure, issuing a buy recommendation for the stock with a target price of ₹350, as noted in their research report dated October 28, 2024. In the second quarter of FY25, JSW Infrastructure (JSWINFRA) achieved an 18% year-on-year revenue increase, reaching ₹10 billion, which was in line with expectations.

Cargo volumes also saw a 16% YoY rise to 27.5 million metric tons (MMT), with third-party cargo surging by 48% YoY to 12.7 MMT, representing 46% of total cargo for the quarter. However, the EBITDA margin declined by approximately 130 basis points YoY and 100 basis points QoQ to 52.0%, falling short of the expected 53.7%.

EBITDA increased by about 15% YoY to ₹5.2 billion, which was 7% below forecasts. Net profit after tax (APAT) grew by 5% YoY to ₹2.6 billion, falling short of the estimated ₹3.2 billion due to higher tax liabilities. By the end of the second quarter of FY25, the company had a cash and bank balance of ₹29 billion and generated cash flow from operations (CFO) of ₹6.8 billion during the first half of FY25. For the first half, revenues reached ₹20.1 billion (up 16% YoY), EBITDA was ₹10.4 billion (up 15% YoY), and APAT was ₹5.6 billion (up 11% YoY).

In the second half of FY25, a revenue growth of 11%, EBITDA growth of 14%, and APAT growth of 3% are anticipated. This performance is expected to lead to a 21% compound annual growth rate (CAGR) in revenue and a 23% CAGR in EBITDA over the same period. The firm maintains a BUY rating with a revised target price of ₹350, based on a valuation of 22 times the EV/EBITDA for September 2026.

JSW Infrastructure’s Profit Jumps 46% JSW Infrastructure’s stock rose by 4.59% to ₹300.70 following a significant 40.04% increase in consolidated net profit, which reached ₹373.37 crore. This was supported by an 18.04% rise in revenue from operations, totaling ₹1,001.36 crore in Q2 FY25 compared to Q2 FY24.

Profit before tax (PBT) surged by 68.8% year-on-year to ₹553.94 crore for the quarter ending September 30, 2024. EBITDA also saw a notable increase, rising 21.6% to ₹607 crore from ₹499 crore in Q2 FY24.

During the quarter, the company handled 27.5 million tonnes of cargo, marking a 16% increase compared to the previous year. This growth was attributed to enhanced capacity utilization at its coal terminals in Mangalore, Paradip, and Ennore, as well as contributions from recent acquisitions, including PNP and the Liquid Storage Terminal in the UAE. Notably, third-party cargo volumes grew even more significantly, up 48% year-on-year, with third-party shipments making up 46% of total volumes in Q2 FY25, compared to 36% a year earlier.

The company’s cash and cash equivalents stood at ₹4,501 crore for the quarter. JSW Infrastructure, part of the JSW Group, is the second-largest commercial port operator in India by cargo handling capacity, focusing on developing and operating ports and terminals under port concessions.

JSW Infrastructure’s Profit Jumps 46% JSW Infrastructure reported its earnings for the quarter ending September on Monday evening, revealing a consolidated net profit of ₹371.51 crore, marking a 46% increase from ₹254 crore in the same quarter last year.

Revenue from operations reached ₹1,001.36 crore, an 18% rise compared to ₹848 crore in the corresponding quarter of the previous year. EBITDA for the quarter was ₹608 crore, reflecting a 21% increase from ₹500 crore in the same period last year. The company also handled 27.5 million tonnes of cargo during the quarter, which represents a 16% year-on-year growth.

Earlier this month, JSW Infrastructure received a Letter of Intent (LOI) from the Maharashtra Maritime Board (MMB) to develop, operate, manage, and maintain a multipurpose port in the Palghar district of Maharashtra.