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Strong execution; growth momentum intact

JSW Energy (JSW IN) reported a strong Q2FY27, with EBITDA up 21% YoY to INR 36bn, 10% above both our and consensus estimates. Beat was led by better generation in group captive plants, Utkal’s shift to long-term PPAs. Growth remains on track, with ~1.7 GW commissioned YTD, including ~1.4 GW of organic renewables and the 300 MW Maruti acquisition (46% of FY27 target), with the balance ~1.6 GW fully de-risked for H2. Management also maintained its 2030 target of 30 GW (CAGR of 17% 2026-30), with a clear FY28–29 runway of 2.5–3 GW of annual renewable additions plus 1,800 MW of Mahanadi thermal expansion, and a growing C&I and group captive portfolio (~8.6 GW installed and under construction). The company reiterated its INR 200bn FY27 capex guidance (INR 95bn spent in H1 including Maruti), and the balance sheet remains comfortable, with operational net debt/EBITDA (excl. CWIP) at 4.94x (4.95x QoQ) and net debt/equity at 1.79x. Retain BUY with TP of INR 615 (at 14x 1HFY29 EV/EBITDA).

Good quarter:

JSW Energy reported a strong Q2FY27, with consolidated revenue up 23% YoY to INR 63.7bn, ahead of our and consensus estimates by 5% and 9%, respectively. Net generation grew 17% YoY to 17.5BU, driven by capacity additions, improved plant performance and the contribution from the Maruti acquisition. Hydro generation increased on higher output from Kutehr and Tidong, while wind and solar generation rose 25% and 36% YoY, respectively. EBITDA grew 21% YoY to INR 36bn, beating our and consensus estimates by 10%, supported by 17% higher generation, new capacity additions, improved plant performance, higher merchant realisations of INR 6.90/unit and Utkal’s shift to long-term PPAs. PBT rose 41% YoY to INR 13bn, while PAT grew 50% YoY to INR 10.5bn, exceeding our and consensus estimates by 66% and 50%, respectively.

Strong Expansion Pipeline:

JSW Energy has commissioned ~1.7 GW YTD, including ~1.4 GW of organic renewables (593 MW solar, 542 MW hybrid, 150 MW hydro, 108 MW wind) and the 300 MW Maruti thermal acquisition, taking installed capacity to 15.1 GW (~61% renewable) and achieving 46% of its 3 GW FY27 target. The balance ~1.6 GW (mainly hybrid, plus solar and wind) is slated for H2FY27 across 30 projects, with land, connectivity and long-term PPAs fully secured, along with ~1 GWh of BESS, taking year-end capacity to ~16.8 GW. Management guides to 2.5–3 GW of annual renewable additions in FY28 and FY29, plus 600 MW of Mahanadi Unit-4 in FY28 and the balance 1,200 MW in FY29. Beyond this, Salboni (3.2 GW, first unit in 2030), the 920 MW Bhutan hydro project and 26.4 GWh of pumped storage support the 30 GW target by FY30, backed by vertical integration through the Halol blade facility, the GE Power India boiler acquisition and Toshiba JSW Power Systems

C&I Capacity to Grow:

C&I (including group captive) is emerging as the key growth pillar. Installed capacity stands at ~3.7 GW (~25% of the portfolio), comprising 3.0 GW of group captive and 741 MW of third-party C&I. A further 4.9 GW is under construction, taking the installed plus under-construction base to ~8.6 GW. This is in line with company’s target of over 8.5 GW by 2030. H2FY27 commissioning includes 553 MW of group captive and 610 MW of third-party C&I. The group’s round-the-clock power requirement is expected to more than double to ~7 GW by 2032 as JSW Steel scales up to 80 mtpa. Of the 6.2 GW of MoUs signed with group companies, 4.5 GW is yet to be tied up and ~2 GW is under advanced discussion. Third-party demand is also building from cement, data centres and corporates such as Amazon. Management sees C&I as more attractive on pricing and returns, and off-grid group captive supply insulates the company from grid curtailment.

Capex and Net Debt trajectory:

JSW Energy reiterated its FY27 capex guidance of ~INR 200bn. H1 organic capex was INR 81.1bn (41% of guidance), or INR 95.2bn including the Maruti acquisition. The company remains adequately funded after the INR 101.5bn equity raise (promoter infusion, QIP and JSW Steel stake monetisation). Net debt rose to INR 655.8bn at end-Sep’26 (INR 613.2bn in Jun’26), comprising operational net debt of INR 584.1bn and CWIP net debt of INR 71.7bn. Cash and equivalents were INR 157.0bn, implying gross debt of ~INR 813bn. Operational net debt/TTM EBITDA improved marginally to 4.94x (4.95x in Q1FY27 and 5.23x in Mar’26), while total net leverage was 5.55x and net debt/equity 1.79x. Management indicated that the FY27 capex will be funded largely through internal accruals and equity monetisation, leaving only ~INR 65bn to be debt-funded. This implies FY27E net debt of ~INR 720bn. Close to a quarter of the debt is fixed-rate, floating debt is MCLRlinked, and management expects the cost of debt to stay below ~8.5% even under a 75 bps repo hike.

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