JSW Energy shares rise 5% after Q2 profit jumps 38%; Jefferies says ‘Buy’

The stock opened at Rs 491.40 and surged 5.90 percent to touch a high of Rs 511. JSW Energy Q2 results JSW Energy reported an over 38 per cent year-on-year increase in consolidated net profit to Rs 1,141 crore in the September quarter, driven by higher revenues. The company had posted a net profit of Rs 824 crore in the second quarter of the preceding financial year. During July-September, the company's total income rose to Rs 6,657.71 crore from Rs 5,361 crore in the year-ago period.

The board of JSW Energy also approved raising of long-term funds up to Rs 5,000 crore through the issuance of rated and listed non-convertible debentures on a private placement basis, in one or more tranches, and authorised the Finance Committee to decide on all matters relating to the issuance of the debentures, from time to time, including finalisation and approval of the detailed terms of issue, the company said in a filing shared on Wednesday.

Brokerages on JSW Energy share price CLSA on JSW Energy share price: Hold, target price Rs 522 CLSA maintained recommended ‘Hold’ for JSW Energy but cut its target price to Rs 522, citing slower earnings growth, delayed capacity additions and lower tariffs. The brokerage said Q2 FY27 saw a shift towards long term PPA (95 percent vs 84 percent), restricting its upside from a roaring merchant power market and decline in PPA tariffs slowing its Ebitda growth to 21 percent.

According to CLSA, the recent fundraising helped address elevated funding costs arising from leveraged acquisitions, while a lower tax rate supported a 50 percent increase in profit after tax (PAT). The brokerage also highlighted weak performance at the company's core thermal operations, with EBITDA per unit of electricity generated declining 9 percent YoY despite a robust merchant power market, largely due to compression in dark spreads - the difference between electricity prices and the fuel costs required to generate power.

CLSA said JSW Energy's shift towards long-term contracts reduces its exposure to merchant power opportunities. It also noted that the company's transition towards a more renewable-heavier portfolio has slowed amid additional coal asset acquisitions. The brokerage cut its FY27-FY29 earnings-per-share estimates by 6 percent-10 percent, citing delayed capacity additions and tariff reductions. It added that the stock was trading at around 23x its estimated FY28 price-to-earnings ratio.

Jefferies on JSW Energy share price: Buy, target price Rs 720 Jefferies maintained a ‘Buy’ rating on JSW Energy with a target price of Rs 720, citing stronger-than-expected operating performance and an encouraging outlook for power demand and project execution. The brokerage said the company's September-quarter EBITDA was 10 percent above its estimates on higher generation and some better merchant sales.

Normalisation of operations at KSK, which accounts for around 12 percent of JSW Energy's capacity, which were disrupted during the June quarter, normalised and helped earnings, the brokerage added. Jefferies noted that JSW Energy had added 1.4 GW of organic renewable energy capacity and 300 MW of inorganic thermal capacity, which compares with the brokerage's expectation of 2.5 GW for FY27. However, the management was very positive about India’s power demand growth and a pickup in JSW Energy's execution.

JSW Energy capacity and expansion plans JSW Energy’s current installed capacity stands at 15,147 MW, of which renewables account for 9,189 MW, or 61 per cent. The renewable portfolio comprises 3,125 MW of wind, 2,426 MW of solar, 1,857 MW of hybrid and 1,781 MW of hydro capacity, complemented by 5,958 MW of thermal capacity. During the quarter, the company signed a Shareholders' Agreement with Druk Green Power Corporation Limited (DGPC), a wholly-owned subsidiary of Druk Holding & Investments, the commercial arm of the Royal Government of Bhutan, to jointly develop the 920 MW Punatsangchhu-III Hydroelectric Project.

The JV will be held 51:49 by DGPC and JSW Neo Energy. This is the company's first power generation venture outside India. Separately, the company acquired Maruti Clean Coal & Power Ltd on August 6, which operates a 300 MW thermal plant in Chhattisgarh, at an enterprise value of approximately Rs 1,410 crore. The plant has a long-term Power Purchase Agreement (PPA) of 195 MW (net) with Rajasthan discoms, with a residual PPA life of 14 years.