JSW Energy Ltd. share price target

We recommend a BUY rating on the stock with a target price of Rs 565/share, implying an upside of 10% from the CMP.

We maintain our BUY recommendation on the stock.

We initiate coverage of JSW Energy Limited (JSWE) with a BUY recommendation and a target price of Rs 800/share, implying a potential upside of 26% from the CMP.

JSW Energy (JSWE) announced a definitive agreement to acquire O2 Power Midco Holdings Pte. Limited, O2 Energy SG Pte. Limited, and their subsidiaries (O2 Power) for a total cash consideration of INR124.68b. We view this move positively,

JSW Energy (JSWE) reported 2QFY25 EBITDA of INR16.8b, below our estimate of INR19.3b. While net generation was up 14% YoY, EBITDA was negatively affected by lower merchant spreads and a one-time tariff impact from the hydro business.

JSW Energy (JSWE) has reported operating profit (EBITDA) of INR 14.2bn, up 16% YoY in Q1FY25, aided by new capacity addition - thermal at 0.4GW and renewables at 0.5GW and an increase in hydro power plant generation (+61% YoY).

Powering sustainable growth

JSW Energy (JSWEL) reported consolidated revenue / EBITDA / PAT of Rs22.5bn / Rs6.5bn / Rs1.8bn (+18.7% / -21.0% / -44.6% YoY) respectively, for Q3FY23. However, adjusting for the Rs1bn (pre-tax) prior period sales during Q3FY22, PAT was lower by 27.8% YoY.

JSW Energy (JSWEL) reported consolidated revenue / EBITDA / PAT of Rs23.9bn / Rs8.9bn / Rs4.7bn (+14.4% / -4.3% / +37.3% YoY) respectively, for Q2FY23.

JSW Energy (JSWEL) has agreed to acquire the 1,753MW RE portfolio of Hyderabad-
based Mytrah Energy for net EV of Rs105.3bn, or 6.4x normalised EBITDA of Rs16.5bn
at P90 levels (FY22 EBITDA was Rs12.4bn).

JSW Energy’s (JSWEL) Q4FY22 reported consolidated revenues / EBITDA / PAT were Rs24.4bn / 11.3bn / 8.6bn (+55% / +79% / +711% YoY) respectively. However, there was a one-time gain of Rs5.2bn / Rs4.9bn at EBITDA / PAT levels respectively due to the tariff true-up order for Karcham Wangtoo HEP for the period FY15-FY22

JSW Energy’s (JSWEL) Board has approved the reorganisation of the company’s green and grey businesses. Its RE business (operational: 1,391MW hydro & 10MW solar; under construction: 240MW hydro & 2,218MW of solar + wind) will be housed under a new wholly-owned subsidiary – JSW Neo Energy. The thermal business (3,158MW) will continue to be part of JSWEL.

1 August 2020 JSW Energy (JSWE)s results reflected the impact of lower merchant sales volumes due to lower power demand and merchant prices. At a consolidated level, EBITDA was down 8% YoY to INR7.5b. Debt reduction continues, with net debt (incl. acceptances) declining ~INR1.6b during the quarter. Interest cost also decreased by 11% YoY. Furthermore, FCF generation would continue to be strong given ~80% of JSWEs capacity is under long-term PPAs. account of lower short-term sales. Short-term sales volumes declined 83% YoY to 123MU. Interest cost fell 11% YoY to INR2.5b given the debt reduction. Other income was up 58% YoY to INR0.8b, led by write-backs of INR0.3b.