Jefferies has reaffirmed its ‘Buy’ rating on JSW Energy Ltd and raised its target price to Rs 745 from Rs 675, implying an upside potential of about 31% from current levels.
Shares of the company were trading at Rs 568, up 1.5% from the previous close. The stock has gained around 11% over the past year. JSW Energy has a market capitalisation of Rs 1.04 lakh crore.
Jefferies turns more optimistic
The brokerage said better execution visibility and an improved balance sheet support its positive view on the company.
Key factors behind the upgrade
Stronger balance sheet
JSW Energy raised Rs 4,000 crore through a qualified institutional placement (QIP), strengthening its financial position and providing support for expansion plans.
Lower leverage
Following the fundraise and the stake sale in JSW Steel, Jefferies has lowered its net debt-to-EBITDA estimates for FY27 and FY28.
The brokerage expects the company’s leverage profile to improve over the medium term.
Growth supported by capacity additions
Jefferies expects project commissioning across renewable and thermal assets to drive double-digit earnings growth in the coming years.
Greater financial flexibility
A stronger capital base is expected to help the company pursue expansion while maintaining financial discipline.
Strong operational performance
JSW Energy added 118 MW of renewable capacity during the quarter.
Net power generation in Q4 FY26 rose 48% year-on-year to 11.7 billion units (BU).
Renewable generation climbed 68% from a year earlier, supported by additions across:
- Wind assets.
- Solar projects.
- Hydro power.
- O2 Power assets.
Evacuation constraints affected generation
Around 160 million units were curtailed because of transmission evacuation issues.
According to the company:
- A large portion is under permanent recovery with tariffs being realised.
- Revenue loss was limited to around Rs 16 crore in Q4.
- The full-year impact was about Rs 50 crore.
The issue is expected to be resolved by July 2026 with the commissioning of a new evacuation line.
Thermal business records strong growth
Thermal generation increased 43% year-on-year to 8.8 BU.
The growth was driven by strong demand from:
- Mahanadi plant.
- Utkal plant.
Key operating metrics included:
- KSK Mahanadi PLF: 93%
- Overall thermal PLF: 78%
The KSK plant generated EBITDA of more than Rs 3,300 crore in FY26, aided by fuel cost optimisation and operational efficiencies.
Quarterly results
For Q4 FY26, the company reported:
- Revenue from operations: Rs 4,499 crore, up 41% from Rs 3,189 crore.
- EBITDA: Rs 2,250 crore, up 87% from Rs 1,204 crore.
- Net profit: Rs 574 crore, compared with Rs 415 crore a year earlier.
Earnings per share stood at Rs 2.11, compared with Rs 2.33 in Q4 FY25.
About the company
JSW Energy Ltd, the energy arm of the JSW Group, has evolved from a thermal and hydro power producer into a broader clean energy platform.
The company has a locked-in capacity exceeding 30 GW across conventional and renewable energy projects.
TL;DR:
Jefferies has raised its target price on JSW Energy to Rs 745 and maintained a Buy rating. The brokerage expects lower leverage, capacity additions and strong execution to support long-term growth.
AI summary
- Jefferies raised JSW Energy’s target price to Rs 745.
- The brokerage maintained a Buy recommendation.
- JSW Energy raised Rs 4,000 crore through a QIP.
- Q4 FY26 power generation increased 48% year-on-year.
- Revenue and EBITDA rose 41% and 87%, respectively.
