Buy JSW Energy; target of Rs 65: Motilal Oswal

Motilal Oswal 's research report on JSW Energy

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 JSWE's capacity is under long-term PPAs. Maintain Buy, with TP of INR65/sh.

Outlook

Furthermore, these tied-up PPAs contribute ~95% to the company's EBITDA. Maintain Buy, with TP of INR65/sh.

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