JSW Energy Gets ‘Buy’ Ratings Despite Weak Q4: Analysts See 10–20% Upside
JSW Energy remains in the spotlight as leading brokerages Motilal Oswal and JM Financial assign ‘Buy’ ratings despite a weak Q4 FY25 performance.
- The company’s stock rose nearly 2%, buoyed by positive sentiment over its aggressive capex strategy and long-term growth outlook.
- Analysts expect a 10–20% upside in share price over the next 12 months, driven by a shift toward stable cash flows and a robust project pipeline.
Motilal Oswal: Over 21% Upside on Capacity-Led Growth
Motilal Oswal has set a target price of ₹592, indicating a 21% upside from current levels.
- The brokerage acknowledges some near-term pressure due to sluggish power demand, which grew only 2% in April.
- However, it believes the company’s long-term capacity expansion will support earnings upgrades, offsetting the Q4 weakness.
JM Financial: Cautiously Optimistic with 10% Target Upside
JM Financial retains its Buy rating, assigning a target price of ₹543, reflecting a 10% potential upside.
- It highlighted risks related to bundling of complex, capex-intensive projects in a tight five-year window, which may strain execution.
- Despite the challenges, JM Financial applauds JSW Energy’s shift from volatile merchant tariffs to contract-based stable cash flows, suggesting revenue visibility ahead.
- The firm forecasts a 25% CAGR in revenue over the next five years, anchored in asset additions and diversification.
Q4FY25 Results: Pressure from Thermal Assets
JSW Energy’s Q4FY25 results were weighed down by underperformance at its Ratnagiri and Barmer thermal plants.
- Power generation at these sites declined by 7% and 11% YoY, respectively, due to operational challenges.
- While fuel costs were lower, EBITDA margins stayed under pressure owing to higher employee costs and elevated other operating expenses.
- These margin concerns have tempered the near-term investor sentiment.
Recent Acquisitions to Boost FY26 Earnings
JSW Energy has completed strategic acquisitions of KSK Mahanadi Power and O2 Power, which are expected to drive EBITDA growth in FY26.
- Mahanadi Power (1,800 MW operational) has 95% of capacity tied up under long- and medium-term Power Purchase Agreements (PPAs).
- The project is backed by secure coal and water arrangements for the full 3,600 MW, ensuring operational reliability.
- O2 Power’s addition will raise JSW’s operational renewable energy capacity to 2.3 GW by Q1FY26, accelerating its RE transition.
Long-Term Growth Ambitions Backed by Capex
JSW Energy has outlined a strategic roadmap to scale up to 30 GW of generation capacity and 40 GWh of energy storage by FY30.
- The company plans to invest ₹1.3 lakh crore between FY26 and FY30, reinforcing its commitment to clean and stable energy growth.
- This is expected to lift EBITDA by 2.7x–3x by the end of the decade, supported by a balanced energy mix and scale efficiencies.
Backed by a strong vision, strategic acquisitions, and a disciplined shift to predictable revenues, JSW Energy is drawing attention from investors seeking long-term growth exposure in the evolving Indian energy landscape.
