JSW Infra share price target: Jefferies cuts target to Rs 395, retains Buy call

Jefferies has marginally lowered its target price for JSW Infrastructure Ltd (JSW Infra) following a review of the company's FY26 annual report, while maintaining its 'Buy' recommendation on the stock.

The brokerage has reduced its target to Rs 395 from Rs 400 earlier, primarily reflecting adjustments arising from the annual report. Jefferies, however, broadly retained its earnings estimates and remains positive on the company's long-term growth prospects.

JSW Infra’s standalone debt rose 32% in FY26, driven by higher loans to subsidiaries for growth capex.

The brokerage said JSW Infra's recently completed Rs 6,500 crore qualified institutional placement (QIP) has strengthened its ability to fund expansion projects while keeping leverage under control.

The fund-raising has also removed a potential equity supply overhang, as promoter ownership has fallen below the regulatory ceiling of 75%.

Why Jefferies remains positive on JSW Infra

Jefferies values JSW Infra at 18 times estimated September 2028 EV/Ebitda, compared with a 16-times multiple assigned to Adani Ports.

The premium valuation reflects the brokerage's expectation that JSW Infra will deliver stronger earnings growth. Jefferies estimates an approximately 24% FY28E-FY30E EBITDA CAGR for JSW Infra, compared with around 16% for Adani Ports.

However, the brokerage identified delays in group capital expenditure plans and expansion of non-core businesses as key risks to its investment thesis.

Major share of FY26 capex linked to expansion

According to Jefferies, around 85% of JSW Infra's FY26 capital expenditure was directed towards key growth initiatives.

These included the acquisition of railway rakes from a promoter entity, the Odisha slurry pipeline project, Jatadhar Port and expansion projects at Jaigarh and Dharamtar.

These projects are targeted for completion by March 2027, making execution a key factor for the company's near-term growth outlook.

Debt rises as investment increases

JSW Infra's standalone debt increased by 32% year-on-year in FY26, with loans and advances to subsidiaries rising as the company funded its growth projects.

Jefferies noted that JSW Infra has raised borrowings at the standalone level and subsequently provided funding to its subsidiaries.

At the consolidated level, net working capital increased to 12% of sales in FY26 from 7% a year earlier, partly due to tax credits.

The company's consolidated leverage also moved higher, with net debt-to-EBITDA rising to 1.2 times from 0.7 times in FY25.

However, Jefferies expects the recent QIP to provide support for balance-sheet deleveraging.

Port capacity expansion remains a key growth driver

JSW Infra's FY26 annual report reaffirmed its ambition to increase port capacity by around 2.2 times to 400 million tonnes (mnt) by FY30.

The expansion is expected to be driven primarily by projects already under development, with additional upside potentially coming from future port privatisation opportunities.

Jefferies said execution remains on track, with the company targeting 61% of its planned capacity addition in FY27.

Logistics business gaining momentum

Beyond ports, JSW Infra is also increasing its focus on logistics.

The company plans to expand its terminal and railway-rake capacity by roughly four to six times, creating another potential source of growth.

Jefferies sees visibility for approximately 25% FY26-FY30E EBITDA CAGR, supported by capacity additions planned by both JSW Infrastructure and the wider JSW Group.

Despite the modest reduction in its price target, Jefferies continues to view JSW Infra favourably, with the QIP, port expansion pipeline and growing logistics operations providing key supports for its long-term growth outlook.