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    Navkar Corporat.

    NAVKARCORP
    Services·28 Jan 2025
    Management Summary

    JSW Infrastructure Limited reported a strong Q3 FY25, with consolidated revenue growing 24% and EBITDA up 20% YoY, driven by increased cargo volumes and the consolidation of Navkar Corporation. The company outlined ambitious growth plans, targeting 400 MMTPA capacity by FY30 and an INR 8,000 crore logistics business with 25% EBITDA margins. While facing some headwinds in iron ore volumes and initial low utilization at its Morbi facility, management remains optimistic about future growth from greenfield projects and strategic logistics expansion.

    Highlights

    5

    • Consolidated Q3 Revenue grew 24% YoY to INR 1,265 crores.

    • Consolidated Q3 EBITDA grew 20% YoY to INR 670 crores.

    • 9-month cargo handled increased 11% YoY to 85.7 million tonnes, with third-party cargo up 45% YoY to 41.7 million tonnes.

    • Total company capacity increased to 174 MMTPA from 170 MMTPA, driven by expansions at Mangalore and PNP ports.

    • JSW Infrastructure Limited received a 'low risk' ESG rating from Morningstar Sustainalytics.

    Concerns

    3

    • Lower cargo volumes in the iron ore terminal at Paradip partially offset Q3 growth.

    • Recognized a non-cash mark-to-market unrealized loss of INR 156 crores in Q3 FY25.

    • Morbi facility utilization is currently low at 25-30%, not yet at breakeven utilization.

    What Changed1

    vs Q1 FY26

    Guidance items13 → 7 (-6)
    Key financials

    Metrics

    6

    Periods

    2

    Q3

    3
    • Consolidated Revenue
      ₹1,265 Cr
      YoY+24%
    • Consolidated EBITDA
      ₹670 Cr
      YoY+20%
    • PAT
      ₹336 Cr
      YoY+32%

    9M

    3
    • Revenue
      ₹3,457 Cr
      YoY+22%
    • EBITDA
      ₹1,885 Cr
      YoY+22%
    • Net Profit
      ₹1,006 Cr
      YoY+21%

    Segment breakdown

    Port Segment (Q3 FY25)
    ₹1,063 Cr Operational Revenue₹570 Cr Operational EBITDA
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹9,000 crores

    Debt

    Net ₹827 crores · 0.4x EBITDA

    M&A

    Navkar Corporation Limited

    acquisition · closed

    Guidance & targets

    7
    CategoryTargetPriority
    Capacity
    Total cargo handling capacity
    400 million tonnes per annum
    		High
    Logistics Business
    Top line revenue
    INR 8,000 crores
    		High
    Logistics Business
    EBITDA margin
    approaching 25%
    		High
    Volume Growth
    Company level volume growth
    10%
    		Medium
    Port Segment
    EBITDA margin (greenfield projects)
    65% to 70%
    		High
    Overall EBITDA Margin
    EBITDA margin (400 MMTPA capacity)
    around 55%
    		Medium
    Port Sector
    Volume growth
    double-digit growth
    		High

    Navkar EBITDA guidance

    March quarter
    CurrentNot yet provided
    TargetSpecific EBITDA guidance for Navkar

    Why it matters

    Management promised to provide specific EBITDA guidance for Navkar, which is key to assessing the profitability of the newly acquired logistics segment.

    That will come back by the March quarter. We will come back📌 and give the guidance for Navkar at that point.

    How to verify

    guidance_and_targets

    Risks & concerns

    3
    RiskSeverity

    Cyclicality of iron ore prices affecting export volumes

    Iron ore prices are cyclical and currently lower, affecting export volumes, though management expects recovery. — Management acknowledged

    medium

    Mark-to-market unrealized loss on hedging

    INR 156 crores mark-to-market unrealized loss recognized, but it's a non-cash charge and follows hedge accounting guidelines. — Management downplayed

    low

    Low utilization at Morbi facility

    Morbi facility, started a year back, is currently at 25-30% utilization and has not reached breakeven, leading to heavy fixed costs. — Management acknowledged

    medium

    Q&A highlights

    8

    “As you are aware, the Jaigarh and Dharamtar ports, they're primarily serving Dolvi steel and Dolvi steel plant is currently expanding from 10 million tonnes per annum capacity to 15 million tonnes. So this lumpy growth will come once when this plant gets commissioned, which will be in around '26 and/or '27, mid '27.”

    Clarifies that significant volume growth from these key ports is tied to the Dolvi steel plant expansion, providing a timeline for investors.

    asked by Achal Lohade

    3 min read6 chapters

    Detailed Narrative

    01

    Q3 FY25 Operational and Financial Performance

    For the period April '24 to December '24 (9 months), total cargo handled stood at 85.7 million tonnes, registering an 11% year-on-year growth. Third-party cargo mix grew by 45% year-on-year to 41.7 million tonnes, increasing its share to 49% from 37% a year ago. Total revenue for the 9 months was INR 3,457 crores (22% YoY growth), with EBITDA at INR 1,885 crores (22% YoY growth) and net profit at INR 1,006 crores (21% YoY growth). For Q3 FY25, consolidated revenue was INR 1,265 crores (24% YoY growth) and consolidated EBITDA was INR 670 crores (20% YoY growth), with PAT growing 32% to INR 336 crores.

    02

    Strategic Priorities and Growth Vision

    Management outlined three top priorities: advancing the expansion plan to 400 million tonnes per annum by FY2030, significantly scaling up the logistics business to a top line of INR 8,000 crores by FY30 with an EBITDA margin approaching 25%, and continuously seeking value-accretive inorganic opportunities. The company aims for an asset-light model in logistics to achieve an industry-leading ROCE. JSW Infrastructure Limited was also rated 'low risk' on ESG by Morningstar Sustainalytics.

    03

    Logistics Business Expansion and Navkar Integration

    The logistics segment is targeted for a top line of INR 8,000 crores by FY30 with a 25% EBITDA margin. The Navkar Corporation Limited acquisition, consolidated from October 11, 2024, serves as a stepping stone for this expansion. The company plans to invest INR 9,000 crores in logistics till FY30, including INR 1,100 crores for Navkar, INR 3,000 crores for GCT/terminal development, INR 3,000 crores for rig acquisition/leasing, INR 1,500 crores for specialized containers, and INR 500 crores for other activities. The strategy involves leveraging group cargo and creating a pan-India logistics network.

    04

    Port Capacity Enhancements and Utilization

    Cargo handling capacity at the Mangalore coal terminal increased to 8.1 MMTPA from 6.7 MMTPA, and PNP port capacity rose to 8 MMTPA from 5 MMTPA, bringing the total company capacity to 174 MMTPA. Interim operations have commenced at JNPA (liquid edible oil, ~90,000 tons handled in Q3) and are in progress at Tuticorin dry bulk terminal. The company expects double-digit volume growth in the port sector for FY25 and FY26, driven by these new capacities and resolution of issues at Paradip.

    05

    Margin Profile Evolution

    The port segment's operational EBITDA increased by 19% in Q3 FY25 to INR 570 crores. Management expects port segment EBITDA margins to improve from the current 52-53% to 58-59% as greenfield projects with higher margins (65-70%) come online. The tank farm business in UAE, contributing to the port segment, already operates at 85%+ EBITDA margins. The overall EBITDA margin for the 400 MMTPA capacity is projected to be around 55%.

    06

    Capital Expenditure Outlook

    For the next three years (FY26-FY28), the company plans to invest approximately INR 15,000 crores in the port business and another INR 3,000 crores in the logistics business (in addition to INR 1,000 crores already spent). This translates to roughly INR 2,000-2,200 crores per annum over the next five years. The capex for logistics will focus on asset-light models, including leasing of rakes and utilizing railway land for terminals, to optimize costs.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.