Buy JSW Energy; target of Rs 900: Motilal Oswal

Motilal Oswal is bullish on JSW Energy has recommended buy rating on the stock with a target price of Rs 900 in its research report dated October 24, 2024.

Broker Research

October 27, 2024 / 16:08 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on JSW Energy

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. Adjusted 2Q PAT was 20% above our estimate at INR8.5b (est. INR7b, +19% YoY), mainly due to higher other income and a lower tax rate. The management maintained its full-year capex guidance of INR150b and highlighted that locked-in capacity stands at 19.2GW and only 3.5GW capacity is awaiting PPA. JSWE also highlighted that transmission and land-related visibility has been achieved for 80% of the pipeline, which has secured PPAs. JSWE remains confident of achieving timely completion of the RE project pipeline. Considering its strong operational performance and market position, we reiterate our BUY rating on the stock with a TP of INR900, valuing JSWE's core business at 15x Dec’26E EBITDA.

Outlook

We value JSWE's core business at 15x Dec’26E EBITDA, reflecting its strong operational performance and market position (FY27 EBITDA discounted for three months at 9%). The stake in JSW Steel is valued at a 25% discount to the current market price, acknowledging the strategic significance of this holding while incorporating a conservative valuation approach. By aggregating the values from these different components, the total equity value of JSWE was determined, leading to a TP of INR900/share.

For all recommendations report, click here