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Healthy capacity expansion drives growth

Reported EBITDA at record high in FY24

JSW Energy’s (JSW IN) Q4 revenue rose 3.2% YoY to INR 27.5bn. Total net generation for Q4FY24 increased 26% YoY to 6.4BUs, driven by contribution from acquired and greenfield RE capacity additions and higher thermal generation. Total RE generation in Q4 rose by 124% YoY to 1.3BUs. EBITDA for Q4 surged 57% YoY to INR 11.7bn, resulting in a 22% YoY increase in PAT to INR 3.45bn. For FY24, net generation increased by 27% YoY to 27.9BUs as the total RE generation increased by 54% YoY to 9.3BUs. For FY24, EBITDA increased to a record high of INR 54bn and PAT increased by 17% YoY to INR 17.2bn. Acquired RE portfolio, greenfield RE capacity additions and higher thermal generation aided earnings.

On track to expand installed capacity by >3x by 2030

JSW made significant strides towards its outlined target of 20GW capacity by FY30 by locking-in additional RE (renewable energy) projects with a cumulative capacity of 3.4GW. It has won solar bids of 2.4GW, comprising 700MW each from SJVN, NTPC and SECI and 300MW from GUVNL. It has won an auction for wind energy (1GW) from SECI under Tranche XVI. Total locked in order book stands at 13.2GW. JSW added greenfield capacity of 681MW in the year. Ind-Barath: Unit-1 (350MW) was commissioned in Jan24, and was gradually ramped up to generate 196MUs. Unit 2 (350MW} is expected to be commissioned in Q1FY26. JSW has already signed a power purchase agreement for 1GWH battery storage project and the work onsite has already started. JSW is hopeful of commissioning the project by Q1FY26. It has signed a PPA for minimum 3.6KTPA green hydrogen offtake with JSW Steel and has received the Letter of Award for 6.5KTPA green hydrogen production facility from SECI under SIGHT Scheme.

Valuations:

Maintain Sell, TP raised to INR 420 At the current market price, JSW is trading at 29x FY26E P/E and 13.5x FY26E EV/EBITDA. We maintain Sell, given expensive valuations. We revise our estimates and arrive at a raised TP of INR 420 (from INR 381), on FY26E EV/EBITDA of 9x for its thermal business, and 11x EV/EBITDA for its renewable business. We ascribe an option value of INR 34 /share for storage projects.

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SEBI Registration number is INH000000933