JSW Infrastructure reported a 17% rise in quarterly revenue to INR 14.8 billion, exceeding market estimates. Despite an 18% profit increase, operating margins narrowed, a key area for investors to track. Following the results, Motilal Oswal has reiterated its positive stance on the stock with a price target of INR 400.
JSW Infrastructure announced a 17% year-on-year increase in revenue, reaching INR 14.8 billion for the recent quarter. This result was ahead of brokerage estimates by approximately 5%. The growth was driven by higher cargo volumes, increased demand for ancillary services, and support from currency fluctuations.
However, the company faced pressure on its operating profit margins. The EBITDA margin, which reflects operational efficiency, fell to 45.5%. This is a decline of 270 basis points compared to the same period last year and 110 basis points from the previous quarter. For investors, this margin contraction is a significant monitorable, as it indicates rising costs that the company must manage even as revenue expands.
On the bottom line, the company reported an adjusted profit after tax of INR 4.3 billion, an 18% increase compared to the previous year. This profit figure beat broker estimates by 21%, largely helped by INR 1.9 billion in other income. While the profit growth is positive, the reliance on other income for this outperformance is a factor shareholders may want to review in future filings.
Following these results, brokerage firm Motilal Oswal has reiterated its Buy rating on JSW Infrastructure, assigning a price target of INR 400. The firm’s view is based on the company's ability to leverage its existing port and logistics assets to capture growing demand from the domestic industrial sector. The brokerage valuation is based on an EV/EBITDA multiple methodology.
Looking ahead, the key for investors will be how the company manages its cost structure to protect margins. The primary monitorables remain the stability of cargo volumes, the ability to improve operational efficiency to offset the recent margin dip, and the effective utilization of newly added capacity. Investors should also watch for management commentary on how they plan to sustain growth in a competitive infrastructure sector.