JSW Energy (JSWEL) reported revenue of Rs26.4bn in 3QFY16; a growth of 11.3% yoy in line with our estimate. Recent acquisition of Hydro capacity of 1,391MW aided in increased generation capacity from 3,140MW to 4,531MW which led to a good revenue performance. EBITDA, too grew by 22.3% yoy to Rs11.9bn but reported PAT disappointed us as it was down by 15.6% yoy below our expectation due to higher interest cost (up 58% yoy). With sustainable core RoEs of 15-17%, we believe current valuation at 1.2x P/B its FY17E, provides margin of safety. Hence, we upgrade our recommendation from SELL to BUY with a Target Price of Rs89....