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JSW Infrastructure Ltd

| Q2 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤16th Oct 25

Summary : JSW Infrastructure reported strong H1 FY'26 growth, driven by port operations and logistics expansion, with significant greenfield and brownfield projects underway and an optimistic outlook for future profitability.

Management Perspective positive : India has emerged as a resilient and stable economy. We are steadfast in our commitment to expanding our cargo handling capacity. The future holds even greater promise as we develop three new greenfield ports.

Concall Report Analysis & Insights

Business Overview

  1. H1 FY'26 consolidated revenue grew 23% YoY to Rs. 2,686 crores.
  2. H1 FY'26 EBITDA increased 14% to Rs. 1,387 crores, net profit grew 13% to Rs. 758 crores.
  3. Q2 FY'26 cargo volumes rose 3% YoY to 28.9 million tonnes, impacted by Paradip iron ore.
  4. Port segment operational revenue increased 10% YoY to Rs. 1,103 crores, with 53% EBITDA margin.
  5. Navkar Corporation achieved strong H1 performance, returning to profitability.

Future Growth Prospects

  1. Targeting 400 million tonnes per annum cargo handling capacity by FY'30.
  2. Developing three greenfield ports (Keni, Murbe, Jatadhar) with 93 MTPA initial capacity.
  3. Slurry Pipeline project is 60-70% complete, on track for March '27 operation.
  4. JNPA liquid terminal nearing commercial operations, Kolkata container terminal redevelopment secured.
  5. Logistics business aims for Rs. 8,000 crores top line by 2030, with Rs. 9,000 crores CAPEX.

Management Insights

  1. India's economy remains resilient and stable, supported by pro-growth policies.
  2. Port sector is crucial for India's trade and infrastructure ambitions.
  3. Focused execution on building world-class port infrastructure across strategic regions.
  4. Expect better H2 growth, driven by firming iron ore prices and group-level growth.
  5. Logistics expansion will be a mix of organic growth and strategic acquisitions.

Signs of Skepticism

  1. Q2 PAT declined 1% YoY despite underlying PBT growth, due to non-cash FX loss.
  2. Paradip Iron Ore Terminal's underperformance significantly impacted overall cargo growth.

Risk Factors

  1. Global economy faces complex terrain, geopolitical tensions, and evolving trade policies.
  2. Subdued cargo volumes at Paradip Iron Ore Terminal due to weak export market.
  3. Monsoon period impacts Slurry Pipeline construction progress.
  4. Unrealized FX loss impacted Q2 PAT, driven by dollar-rupee rate fluctuations.

Good To Know

  1. Achieved investment-grade rating of BBB-minus from S&P and Fitch.
  2. Aggregate CAPEX commitments are Rs. 3,300 crores, with H1 FY'26 spend of Rs. 902 crores.
  3. Net debt stands at Rs. 1,810 crores, with a net debt to operating EBITDA of 0.75.
  4. Adopted tonnage tax for Jaigad port, projecting Rs. 17 crores in tax savings for FY'26.
  5. Kudathini rail siding acquired for a state-of-the-art multimodal logistics park.

Key Drivers

  1. Greenfield ports nearing completion.
  2. Logistics network expansion.
  3. Iron ore market recovery.
  4. New terminal privatizations.

Key Analyst Discussions

Competitive Environment

  1. RFQ for Paradip south key terminal is currently in the market.
  2. Other terminals in Paradip will come up for mechanization bids.
  3. Kolkata balance of NSD and Tuticorin outer harbor bids expected soon.

Market Trends & Consumer Behavior

  1. Iron ore prices are firming up, expecting better performance from October.
  2. Nepal traffic is expected to shift back to Kolkata, driving growth.
  3. Fujairah black oil demand normalizing, volumes expected to increase.

Financial Highlights

  1. H1 port volumes grew 4%, full fiscal guidance is 8-10% growth.
  2. Port realization per tonne increased 7% YoY due to mix and rate hikes.
  3. FY'26 CAPEX target is Rs. 4,000 crores for port and Rs. 1,500 crores for logistics.
  4. Logistics revenue target of Rs. 7-8 billion and EBITDA of Rs. 1 billion for FY'26 maintained.
  5. Consolidated EBITDA margins expected to oscillate between 45% and 50%.

Product Composition

  1. Logistics revenue mix is projected as 60% domestic and 40% EXIM.
  2. Group cargo contribution to logistics revenue is expected to be 35-40%.

Strategic Considerations

  1. Jatadhar port and Slurry Pipeline are 60-70% complete, on schedule.
  2. Kolkata terminal interim operations expected by financial year-end.
  3. Logistics growth will be a mix of organic and inorganic acquisitions.
JSW Infrastructure Ltd (JSWINFRA) Concall Report Analysis & Insights | Dhanarthi