Elara Securities (India) has reaffirmed its BUY rating on JSW Energy (JSW IN), with a target price of INR 630, offering a 43% upside from the current market price of INR 487. This optimistic outlook comes on the heels of a transformative fiscal year and the formal rollout of the company’s ambitious Strategy 3.0, which lays the blueprint for exponential growth across generation, storage, and green energy solutions by FY30.
📌 Q4FY25: Mixed Earnings, Solid Operational Growth
JSW Energy’s Q4FY25 performance was marked by strong revenue growth but moderate profitability expansion, owing to rising costs and higher leverage tied to aggressive capacity additions. Revenue rose 15.7% YoY to INR 3,190 crore, while net generation surged 24% YoY to 7.9 billion units (BU)—underscoring a strong asset utilization trend.
Breakdown of Q4FY25 vs Q4FY24:
- EBITDA: INR 1,205 crore (↑3.1% YoY)
- Interest Expense: INR 675 crore (↑27% YoY)
- Adjusted PAT: INR 335 crore (↓3% YoY)
- Reported PAT: INR 415 crore (↑20% YoY, aided by one-time reversal from Mytrah)
EBITDA margins contracted slightly to 38% from 42%, due to higher employee costs (↑40% YoY) and other operating expenses. However, the jump in other income (↑149% YoY) provided some offset.
🌐 Strategy 3.0: A Green Superpower in the Making
Having successfully completed its Strategy 2.0 goals—surpassing the 10GW mark with 12.2GW installed capacity in FY25—JSW Energy is now setting its sights higher:
⚙️ Targets for FY30:
- 30 GW of generation capacity
- 40 GWh of energy storage
- New solutions in FDRE, hybrid, and green hydrogen
With 10.3 GW currently under construction and an additional 6.7 GW in pipeline, Elara calls the FY30 targets “fully backed by a visible and executable pipeline.”
Breakdown of Construction Portfolio (10.3 GW):
- Wind: 2.07 GW
- Solar: 3.2 GW
- Hybrid: 3.4 GW
- Thermal: 1.6 GW
Additional Pipeline (6.7 GW):
- Hybrid: 3.7 GW
- Solar: 960 MW
- Thermal: 1.8 GW
- Wind: 250 MW
This not only cements JSW’s place as a key player in India’s energy transition, but also adds flexibility to be selective in competitive renewable bids going forward.
💸 Financial Picture
Despite short-term margin headwinds, Elara forecasts a robust financial trajectory over FY26–FY28, supported by large asset rollouts and improving efficiencies.
Key Projections (FY26E to FY28E):
| Metric | FY26E | FY27E | FY28E |
|---|---|---|---|
| Revenue | 20,900 | 24,100 | 27,000 |
| EBITDA | 9,680 | 12,100 | 14,300 |
| Adj. PAT | 2,040 | 2,990 | 4,070 |
| ROE | 6.8% | 9.3% | 11.5% |
| Net Debt/EBITDA | 4.0x | 3.9x | 2.9x |
| EV/EBITDA (x) | 11.3 | 9.0 | 7.7 |
The company expects EBITDA margins to expand to over 52% by FY28, supported by high-margin renewable projects and storage integration. Despite a spike in net debt (INR 49,600 crore in FY25), internal accruals are expected to support much of the upcoming capex.
📈 Valuation & Upside Catalysts
Elara values JSW Energy at a FY27E EV/EBITDA multiple of 13x, leading to an equity value of INR 603/share. It also assigns an option value of INR 27/share for the recently acquired KSK Mahanadi plant, whose performance is improving with PLF rising from 67.4% to 79%.
Total Target Price: INR 630/share (↑29% from CMP)
Implied Upside from CMP INR 487: +29% base, +43% including re-rating potential
📌 JSW Energy vs Market
Despite the bullish outlook, JSW Energy has underperformed broader indices over the last 12 months, down 18.5%, while the Nifty gained 12.9%. That said, a recent 11.5% rebound in the last 3 months suggests investor sentiment may be turning.
Shareholding Trends:
| Quarter | Promoters | FII | DII |
|---|---|---|---|
| Q4FY25 | 69.3% | 13.4% | 11.0% |
FIIs have steadily reduced exposure (from 15.4% to 13.4%) over the last year, but DIIs have increased theirs—signaling rising domestic conviction.
🗣 Analyst Commentary
“JSW is poised for significant growth, led by steady operations, a robust balance sheet, and sufficient internal accruals to fund its expansion. The shift towards hybrid and storage-backed energy will transform JSW into a fully integrated energy solutions provider,”
— Rupesh Sankhe, Analyst, Elara Securities
🔮 Strategic Risks to Watch
While Elara’s bullish stance is built on execution visibility and financial leverage, there are a few key risks:
- Execution delays on 10.3 GW of ongoing projects
- Cost inflation in storage and renewable tech
- Policy shifts around thermal vs. green energy
- Higher interest rates could erode debt sustainability (currently 9.05%)
🧩 Final Thoughts
JSW Energy’s Strategy 3.0 reflects a bold and future-ready shift—cementing its position at the intersection of power generation, energy storage, and green hydrogen. Despite current valuation multiples appearing rich, Elara believes the growth premium is justified, particularly given India’s vast and growing base-load and renewable demand.
As global investors pivot toward decarbonization plays, JSW Energy—with its integrated asset pipeline and hybrid innovation—may well prove to be a compelling long-term structural story.
For investors with a 3–5 year horizon, Elara’s 43% upside forecast may be just the beginning. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.
Disclosure: The author has no financial interest in JSW Energy or Elara Securities. This article is based solely on publicly available data and Elara’s published research report dated 16 May 2025.