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Recommendation Rationale

* Installed Capacity grew by 443 MW, up 3% QoQ (up 71% YoY) to 13.2 GW in Q2FY26, led by organic RE capacity additions (240 MW Kutehr Hydro, 148 MW Wind, and 56 MW Solar). Installed capacity will reach 15 GW+ by the end of FY26, and it will grow by 20% CAGR to 30.5 GW by 2030, which is now already locked in. It has 12.5 GW of capacity under construction, all of which is fully tied up under longterm PPA, and the majority (~10.9 GW) of the under-construction 12.5 GW is RE capacity. Led by the increased capacity, net generation grew by 52%/11% YoY/QoQ to 14.9 BUs in Q2FY26.

* No Impact of RE Curtailment So Far: Due to high solar capacity additions, the grid is facing a capacity evacuation challenge, especially during solar hours, leading to grid curtailment. The Management believes that this factor needs to be assessed for the upcoming 2-3 years. However, once new connectivity is added to the grid, the evacuation will improve. Furthermore, the company is not affected by the RE curtailments as it has long-term PPAs that cover scheduling in its terms (General network access/GNA).

* Increasing Bids from States: JSWE has 1.6 GW/1.8 GW of Salboni and KSK brownfield thermal projects in the pipeline. The nation-wise thermal bidding has been ~11.6 GW from various states so far in H1FY26. States now prefer signing of PPAs for fresh thermal capacities for promoting investments in the state. Recent bids were seen from the states of Bihar, MP, West Bengal, Assam, UP, and Maharashtra. Further, even in RE space, boost has been seen from states for setting up of wind and solar capacities as i) ISTS waiver starts phasing out post Jun’25 (25% incremental ISTS charge payable each year for projects commissioning post Jun’25) ii) Intra-state PPAs make RPO (Renewable purchase obligation) compliance simpler.

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