JSW Energy gets a raise in target price to Rs 500 as Jefferies sees growth drivers unfolding

Last week, JSW energy shares rallied after reports said that PE investors TPG, Tepco and Brookfield were in talks to buy a stake in JSW Neo Energy.

Jefferies has reaffirmed its 'buy' rating on JSW Energy and raised the target price to Rs 500 per share. The move reflects the foreign brokerage firm's confidence in the company's growth prospects and its potential to deliver substantial returns to investors.

At 9:36am, shares of the company were trading 2.35 percent higher at Rs 403.20 on the BSE.

Jefferies highlights three key triggers that are expected to play out over the next 12-24 months, impacting JSW Energy's stand in the market. First, there is a notable improvement in visibility as the company's renewable energy capacity is set to increase from 52 percent in FY23 to 81 percent by FY30. Second, the commissioning of a 700-MW merchant capacity comes at a crucial time when peak power deficits are a concern, further solidifying the company's role in meeting India's energy demands.

Last, JSW Energy's progress in developing one of India's first green hydrogen plants and an energy storage battery unit shows its commitment to sustainability and innovation. These developments have led the brokerage house to forecast a 41 percent compound annual growth rate (CAGR) for EPS (earnings per share) from fiscal year 2024 to 2026.

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Last week, JSW energy shares rallied after reports said that private equity investors TPG, Tokyo Electric Power Company (Tepco) and Brookfield were in talks to buy a stake in JSW Neo Energy.

The PE trio is planning to pick up a minority stake in JSW Neo Energy, a subsidiary of listed JSW Energy, a newspaper report has said. It is likely that a deal with two of these funds will be finalised in the coming weeks. JSW Group aims to raise up to $500 million from this stake sale, which will likely be utilised for expanding its presence in the renewable energy space.

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