Stock idea 2025: MOFSL in its latest note picked JSW Infrastructure Ltd, the second-largest private ports operator after Adani Ports, as its top 2025 stock idea. Capacity expansion will likely aid growth, it said while adding that JSW Infra is well-positioned to gain higher market share going ahead.
With a focus on expanding capacity, improving third-party mix in overall cargo, and improving utilisation levels at existing ports and terminals, MOFSL expects JSW Infra's volume growth trajectory to continue.
"Considering stable growth levers at its existing ports and terminals, a higher share of third-party customers, sticky cargo volumes from JSW Group companies, and an expanding portfolio, we expect JSW Infra to strengthen its market dominance, leading to a 14 per cent volume CAGR over FY24-27," MOFSL said.
This, the broking firm said, should drive a 19 per cent CAGR in revenue and a 20 per cent CAGR in Ebitda over the same period. It reiterated its 'Buy' rating with a revised target price of Rs 375, based on 25 times September 2026 EV/Ebitda.
MOFSL also has 'Buy' rating on Adani Ports, as it believes the integration of the logistics with the ports business is enhancing Adani Ports' service offerings and transforming the company into a transport utility. It suggested a target price of Rs 1,530 on Adani Ports earlier this month.
Peer JSW Infra, MOFSL said, has reported a 22 per cent cargo volume CAGR over FY18-24 and 13 per cent YoY growth in H1FY25, far outpacing the industry growth rate of 4 per cent over the same period.
MOFSL said the government is actively working on port privatisation efforts, which include divesting existing terminals owned by port authority and port trusts to private players and setting up new terminals by private players.
"We believe JSW Infra is extremely well poised to participate in this. The company’s strong balance sheet would also allow it to add new ports to its portfolio," it said.
JSW Infra has capex plan of Rs 30,000 crore. Out of this, Rs 15,000 crore would be spent over FY25-28 towards expanding the total cargo handling capacity from 170 mtpa currently to 288 mtpa by FY28 and eventually to 400 mtpa by FY30, banking on the rise of India’s cargo movement.
In line with its capex program, the company has undertaken brownfield expansions at its Jaigarh and Dharamtar ports (two of its largest ports in terms of capacity and volumes), adding a combined 36 mt with an estimated capex of Rs 2,360 crore, which is targeted for completion by March 2027.
MOFSL noted that JSW Infra has received an LoA from Southern Railways, Chennai Division, for the construction and operation of Gati-Shakti Multi-Modal Cargo Terminal (GCT) at Arakkonam, Chennai. This would help establish a pan-India logistics network, enhancing last-mile connectivity. It also has a slurry pipeline project (under development) from JSW Utkal Steel for INR17b. This is a 20-year, long-term, take-or-pay agreement for using the pipeline to transport iron ore. The project will start contributing materially to revenue from FY28, MOFSL noted.
Meanwhile, the brokerage also has 'Buy' rating on Adani Ports, as it believes the company is very-well placed to continue to outpace industry growth and gain market share. The integration of the logistics business with the ports business is enhancing its service offerings and transforming the company into a transport utility. It has a target price of Rs 1,530 on Adani Ports.