New Delhi: JSW Infrastructure Limited is focused on growing in the double digits this fiscal year as it seeks strategic options to expand across India, Arun Maheshwari, its joint managing director and CEO told Mint.
India’s second-largest private port operator, he predicted, would easily outperform the market by leveraging its strong balance sheet to explore all three methods of expansion – brownfield, greenfield and collaborating with another entity.
“There are three parts of growth in this sector – either we acquire more companies, make successful bids for upcoming terminals, or collaborate with existing companies. Currently, we are looking at all these options in India,” Maheshwari added. The company ‘s balance sheet remains well positioned to pursue growth, with cash and cash equivalents of ₹4,571 crore at the end of the first quarter of FY25.
The company has a total cargo handling capacity of 170 million tonnes per annum (mtpa) spread across two ports and eight terminals at major ports. It plans to increase its capacity to 250 mtpa by 2027 and 400 mtpa by 2030 by expanding existing facilities, building new ones, and making acquisitions.
JSW Infra remains interested in the Vadhavan and Great Nicobar ports, which are likely to come up for bidding soon, he said, adding the company believes these to be lucrative projects and will assess the costs and potential returns once they come up for bidding.
Growth prediction
Maheshwari also said he expects the company to grow 10% to 12% this fiscal year and the overall industry to grow just 4%. This hinges on the company’s ability to maintain its growth momentum by catering to the increasing exports, the rising demand for transportation, and gains from recent acquisitions, he added.
During the quarter ended June 2024, JSW Infra reported that its third-party cargo volumes grew 48% year-on-year (yoy), and its share in total cargo rose from 37% to 50%. Total cargo volumes grew 9% yoy, amid a planned shutdown at JSW Steel’s plant in Dolvi, a captive customer of the group.
“During the quarter a plant of our captive customer was shut down, leading to an increase in contribution from third-party volumes, but the third-party contribution will sustain around previous levels of 45% of the total cargo volumes,” Maheshwari added. The company aims to achieve a 50:50 contribution from captive and third-party cargos.
The company reported revenue of ₹1,104 crore in Q1, up 20% from a year ago, while profit fell 9% yoy to ₹297 crore. Earnings before interest, tax, depreciation, and amortisation (Ebitda) came in at ₹609 crore with a margin of 55%. The fall in profit was due to a one-time foreign-exchange gain adjustment made during the first quarter of FY24.
Order wins
The company recently acquired a majority stake in Navkar Corp Ltd, a multi-modal logistics service provider with a container train operator (CTO) licence, at an enterprise value of ₹1,644 crore. This marked its entry into logistics, which is expected to complement its existing businesses.
It has also won a contract to build and operate a multi-modal cargo terminal near Chennai. With two operational terminals in the vicinity, this will help augment the company’s ports business. It also acquired an under-development slurry pipeline project from JSW Utkal Steel, a promoter-owned entity, for ₹1,700 crore. This is expected to boost connectivity to the upcoming Jatadhar Port in Odisha.