Shares of JSW Infrastructure jumped 9 percent to Rs 260 on February 21 afternoon. It has gained for the second consecutive session after domestic brokerage firm Motilal Oswal picked the stock as a ‘top pick’ in the ports sector.
The brokerage has set a target price of Rs 330, which implies a 39 percent upside potential from its last close price of Rs 238 on the National Stock Exchange. JSW Infrastructure shares have gained 11 percent this week.
India’s ports sector handles 95 percent of the country’s export volume and 70 percent of its export value, with Motilal Oswal forecasting strong growth ahead.
The brokerage expects cargo traffic to grow at an annual rate of 3 to 6 percent with utilisation levels remaining stable around 55 percent over the medium term. Meanwhile, container traffic is forecast to grow 4 to 7 percent annually over the next five years due to increased imports, lower freight costs and normalisation of global supply chains. “The Indian port sector is expected to witness significant growth.
Between FY23 and FY28, the country’s ports are estimated to add 500-550MTPA of capacity annually, led by increased handling of petroleum, oil, lubricants (POL), coal and containerised cargo,” the brokerage said in a note.
Analysts are also bullish on Adani Ports and Special Economic Zone (APSEZ), the largest private port operator in India, and have given it a ‘buy’ call as it continues to gain market share while generating strong cash flows and maintaining its leverage position.
Motilal Oswal said, “India’s extensive coastline and growing investments in inland waterways, coastal shipping and port privatisation initiatives by the government are expected to benefit companies such as APSEZ and JSW Infra, helping them handle a larger share of volumes at Indian ports.”
India’s port sector is critical to its trade ambitions and economic growth. With focused policy support, private investment and infrastructure development under initiatives such as Sagarmala and Marijuana Amrit Kal Vision 2047, India is well positioned to emerge as a global maritime hub.
At around 12:20 pm, the company’s shares were trading at Rs 255, up 7 percent from its previous close on the NSE. Meanwhile, APSEZ shares were trading at Rs 1,086, down 2.3 percent from its previous close on the NSE.
