JSW Infra shares: Jefferies trims target after FY26 annual report, says this

Jefferies on Monday trimmed its target price for JSW Infrastructure Ltd (JSW Infra) to Rs 395 from Rs 400 earlier, while maintaining its 'Buy' call on the stock. The foreign brokerage said the recent qualified institutional placement (QIP) for Rs 6,500 crore has enabled the developer and operator of ports and terminals to fund growth capex, with leverage in check. Jefferies said the development removes potential equity supply overhang as promoter shareholding is now below the 75 per cent regulatory threshold.

It broadly maintained its earnings estimates and revised lower its target on the JSW Infra stock to Rs 395 from Rs 400 earlier, factoring in the annual report adjustments.

Jefferies said it valued JSW Infra based on 18 times estimated September 2028 EV/Ebitda against 16 times for Adani Ports, to reflect 24 per cent FY28E-30 Ebitda CAGR for JSW Infra against 16 per cent for Adani Ports.

Any delay in group capex plans and noncore capex expansion plans are seen as key risks.

Jefferies said 85 per cent of JSW Infra's FY26 capex was spent towards acquisition of railway rakes from promoter entity, Odisha slurry pipeline, Jatadhar port, and Jaigarh and Dharamtar expansion, all of which were targeted by March 2027.

JSW Infra's standalone debt rose 32 per cent in FY26 YoY, with rise in loans and advances to subsidiaries, given the growth capex. JSW Infra borrowed at standalone level and lends it to subsidiaries, Jefferies noted.

"Consolidated net working capital rose to 12 per cent of sales vs 7 per cent YoY due to tax credits. Consolidated balance sheet leverage rose to 1.2 times net debt/Ebitda in FY26 vs 0.7 times in FY25. However, we note that the QIP should delever the balance sheet," Jefferies said.

Meanwhile, JSW Infra's annual report reiterates a 2.2 times port capacity rise target to 400 mnt by FY30E, led by under-development capacity with potential upside from privatisation plans. Jefferies said execution remains on track for 61 per cent capacity addition targeted in FY27.

"Logistics ambitions are gaining traction, with plans to scale up terminal and rake capacity by 4-6 times. 25 per cent FY26-30E Ebitda CAGR visibility remains, driven by JSWI and JSW group capacity addition plan," it said.