JSW Infrastructure Shares Surge to 52-Week High at Rs. 245, JM Financials Reiterates ‘Buy’ Rating with Revised Target of Rs. 255

Shares of JSW Infrastructure were locked at 8 per cent upper circuit at ₹245 apiece on the BSE, hitting its 52-week high mark on Wednesday, December 6. Domestic brokerage firm JM Financials has reiterated its ‘buy’ rating for the stock and raised the target price by 2 per cent over the recent uptrend in share price.

At a current market price (CMP) of ₹238, JM Financials has given a revised target price of ₹255 for JSW Infrastructure, which is 2 per cent higher than the previous target of ₹250 given in March 2023 and sees a potential upside of 12.3 per cent on the stock.

JSW Infrastructure Share Price

On Wednesday, shares of JSW Infrastructure opened at ₹227.20, and gained 7.83 per cent to hit a 52-week high of ₹245, against a previous close of ₹227.15 on the BSE. The marine cargo handling company commands a market capitalisation of ₹50,179.54 crore

Shares of JSW Infrastructure settled 5.19 per cent higher at ₹238.95 apiece on the BSE. Part of Sajjan Jindal-owned JSW Group, JSW Infrastructure is a port-related infrastructure company. Its ports and terminals have an installed cargo handling capacity of 153.43 MTPA.

Shares of JSW Infrastructure got listed at a premium on the stock exchanges in October 2023. On the NSE and BSE, JSW Infrastructure share price was listed at ₹143 per share, 20.2 per cent higher than the issue price of ₹119.

Earlier this week, JSW Infrastructure announced that said it has signed an agreement with SP Port Maintenance, a Shapoorji Pallonji Group company, to acquire majority stake in PNP Maritime Services (PNP Port).

The agreement is to acquire over 50 per cent shares in PNP Port through its subsidiary JSW Dharamtar Port, JSW Infrastructure said in an exchange filing.

“JSW Dharamtar Port has entered into share purchase and other relevant transaction documents for acquisition of 50 per cent plus 1 shares (10,00,001 equity shares) of PNP Maritime Services Private Limited from SP Port Maintenance Private Ltd,” it said.

PNP Maritime Services will become a step-down subsidiary of the company, it said. The transaction is for maximum equity purchase consideration of ₹270 crore. It is expected to be completed in 15 days.

In a separate statement, JSW Infrastructure said the acquisition is expected to strengthen its position to provide hub-and-spoke model services to customers, thereby saving substantially in the logistics costs.

JSW Infrastructure intends to upgrade PNP Port facilities and expand its capacity from current 5 MTPA to 19 MTPA (million tonne per annum) in a phased manner. The acquisition values PNP Port at an enterprise value of around ₹700 crore with the current capacity of 5 MTPA.

This acquisition is in line with JSW Infrastructure’s strategic vision to organically or inorganically expand to offer comprehensive logistics services closer to areas where cargo is consumed or generated’’ said JM Financials.

‘’PNP port is expected to strengthen JSW Infra’s ability to provide Hub & Spoke model services to customers (and also expand the share of third-party customers) and also develop huge synergies with its existing ports and terminals,’’ added the brokerage.

Background on PNPL Port

PNPL is an operational port situated at Shahabad in Raigad, Maharashtra, with a 30-year concession (expiring in Sep’29) from Maharashtra Maritime Board. It currently has a capacity of 5mntpa and handled bulk cargo of 3.9mnt in FY22 (2.9mnt in 1HFY23).

PNPL has a strategic location advantage with direct access to large cargo centres in Maharashtra through the Central and Konkan Railway networks and the Mumbai-Goa highway. This will help in seamless handling of container, liquid, and bulk cargo shipments and enable JSW Infrastructure to cater to diverse customer needs.

We believe that this strategic acquisition will grant JSW Infra access to more regions in the hinterland and expand the share of third party cargo. Presently, the PNP port primarily handles coal imports, which are being carried out manually, leading to low margins (~20 per cent),’’ said JM Financials.

We believe JSW Infra will be able to expand PNP’s margins over time by adequately investing in its modernisation. We reflect this acquisition in our estimates and arrive at a revised Mar’25 target price of ₹255 basis, 18x FY26 EV/EBITDA,’’ said the brokerage.

Domestic equity benchmarks the Sensex and Nifty 50 extended their record-setting spree into the third consecutive session on Wednesday as sentiment remained bullish on the expectations of political stability after General Elections 2024 and a strong growth outlook. Nifty 50 and Sensex closed higher for the seventh consecutive session. While the Nifty 50 has jumped 5.8 per cent, the Sensex has gained 5.6 per cent in the last seven days.

On Wednesday, Nifty 50 closed at 20,937.70, up 83 points, or 0.40 per cent while the Sensex closed the day with a gain of 358 points, or 0.52 per cent, at 69,653.73. Both indices closed at their fresh closing peaks. During the session, the Nifty 50 hit its fresh record high of 20,961.95 and the Sensex, too, scaled a fresh peak of 69,744.62.