Top Conviction Ideas : Buy JSW Energy Ltd for Target Rs. 705 - Axis Securities Ltd
* Improved Power Generation: During Q1FY26, the company’s installed capacity increased from 10.9 GW in Q4FY25 to 12.8 GW. The 1.9 GW of capacity additions was mainly led by 1.3 GW of acquired O2 portfolio and 550 MW of organic RE capacity additions (including 450 MW of O2 portfolio, which was commercialised by the company post acquisition). Further, KSK Mahanadi, which was operationalised in Mar’25, was fully operational for Q1FY26. Led by the capacity additions, its power generation stood at 13,494 MUs, up 71% YoY and QoQ.
* Capacity additions: The company added 550 MW of organic renewable energy capacity in Q1FY26. For FY26, it targets to add 3-4 GW of organic capacity, and it is well on track to achieve the target. It has a total locked-in capacity of 30 GW and is well placed to achieve the target of 30 GW installed capacity by 2030. JSW currently has 12,983 MW of capacity under construction, of which 11,383 MW is renewable projects with an expected commissioning period of 3 years.
* Strategic investments in Equipment Manufacturing: The company is in the process of establishing a battery assembly plant in Pune with a rated capacity of 5 GW per annum. This plant would require an initial capex outlay of Rs 165 to 180 Cr. Further, JSW is also investing capital in wind blade manufacturing facilities located in western and southern India. The investments in equipment manufacturing are expected to yield cost efficiencies due to proximity to power plants.
* Reduced Reliance on Merchant Markets: In line with the company’s target to stabilise its earnings, it has tied up the open capacity of the import-coal-based Vijayanagar plant, thereby reducing its exposure to the merchant market for imported coal-based generation. Its open thermal capacity has come down to 974 MW from 1,400 MW in Q4FY25. Further, of this 974 MW, 90% are domestic coal-based plants and thus, reducing its exposure to global coal price volatility.
For More Axis Securities Disclaimer https://simplehai.axisdirect.in/disclaimer-home
SEBI Registration number is INZ000161633
.jpg)
