JSW Infrastructure Sees Stock Boost Following Fitch Ratings Revision
JSW Infrastructure’s share price jumped 5% to ₹324.85 on the Bombay Stock Exchange (BSE) in Monday’s intraday trading, following a significant ratings update from Fitch Ratings. The agency revised its outlook for the company to ‘Positive’ and affirmed its credit rating at ‘BB+’.
A ‘BB+’ rating indicates a marginally lower credit risk compared to a ‘BB’ rating, though the company remains somewhat susceptible to economic fluctuations. At midday, JSW Infrastructure’s share price stood 4.41% higher at ₹322.90 on the BSE, while the BSE Sensex saw a modest increase of 0.12% to 81,798 levels.
Fitch’s positive outlook for JSW Infrastructure reflects its expectations that the company’s leverage—measured as gross debt to EBITDA—will stay within limits conducive to an upgrade, despite increased investment plans. The agency also anticipates that the company will maintain its third-party cargo mix at around 40% in the medium term. JSW Infrastructure’s credit rating benefits from its diversified port locations, reasonable tariffs, and long-term take-or-pay contracts, which contribute roughly 30% of its total revenue.
However, the rating is moderated by high exposure to coal and iron ore cargo and significant customer concentration risk, particularly from JSW Steel, which accounts for over half of the company’s cargo volume. Nonetheless, JSW Infrastructure’s credit assessment remains independent of JSW Steel’s rating.
In its recent quarterly report, JSW Infrastructure, India’s second-largest private port operator by cargo volume, reported a nearly 9% decline in first-quarter profit due to rising expenses. The company’s consolidated net profit fell to ₹292 crore for the quarter ending June 30, down from ₹321 crore in the same period last year. Despite a 9% increase in cargo volume to 27.8 million tons and a 15% rise in revenue from operations, operational costs surged 23%, contributing to a 41% increase in total expenses.
Part of the JSW Group, JSW Infrastructure operates 10 ports across India and recently expanded into logistics by acquiring a majority stake in Navkar Corporation through its unit JSW Port Logistics. Currently, the company’s shares are trading at a price-to-earnings multiple of 203.89 times, with an earnings per share of ₹1.52.
JSW Infrastructure remains a significant player in India’s port sector, providing a range of maritime services, including cargo handling, storage, and logistics, and is transitioning into a comprehensive logistics solutions provider.
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