Buy JSW Energy; target of Rs 620: Motilal Oswal

Motilal Oswal's research report on JSW Energy

JSW Energy’s (JSWE) 1QFY26 revenue was 6% above our estimate at INR51.4b (+79% YoY), and EBITDA stood at INR27.9b (+97% YoY), beating our estimate by 24%. The strong beat was driven by higher than estimated contributions from recently acquired assets—KSK Mahanadi (1.8 GW) and O2 Power (1.3 GW)—alongside higher generation from the fully contracted Vijayanagar coal plant. In 1QFY26, the company commissioned 1.9GW (1.7GW from O2 Power and 200MW under its RE platform, JSW NEO) and reiterated its FY26 capacity addition target of 3-4 GW (excluding 1.3GW O2 Power). Capex for the quarter stood at INR24b, with full-year FY26 guidance maintained at INR150-180b. The 240MW Kutehr Hydro project is expected to be commissioned in the next few days.

Outlook

By aggregating the values from these different components, the total equity value of JSWE was determined, leading to a TP of INR620/share.