A major Indian renewable energy player, known for its ambitious expansion plans, got a rating upgrade from a prominent financial firm with a positive outlook, maintaining a “Buy” rating and highlighting a significant 38.6 percent upside potential. The news centres on the company remarkably exceeding its long-term power capacity target well ahead of schedule.
JSW Energy Limited‘s stock, with a market capitalisation of Rs. 88,716 crores, rose to Rs. 513, hitting a high of up to 1.7 percent from its previous closing price of Rs. 504.45. However, the stock over the past year has given a negative return of 29.5 percent.
Jefferies Views
Jefferies has reiterated its “Buy” rating on JSW Energy, setting a target price of Rs. 700 per share, implying an upside of 38.6 percent. The brokerage highlights that the company has already exceeded its FY25 capacity goal of 10 GW, which was originally set in FY21.
Looking ahead, JSW Energy has revised its FY30 capacity target upward from 20 GW to 30 GW. It’s recently launched “Strategy 3.0” focuses on disciplined capital allocation and long-term growth. Jefferies also notes that an improvement in the net debt-to-EBITDA ratio did act as a key catalyst for a potential stock re-rating.
Financial Highlights
The company reported a strong financial performance in Q4FY25, with revenue rising to Rs. 3,189 crore, a growth of 30.7 percent QoQ from Rs. 2,439 crore and 15.7 percent YoY from Rs. 2,756 crore. This reflects sustained business momentum and improved operational efficiency, supported by a 3-year sales CAGR of 13 percent.
Net profit for Q4FY25 stood at Rs. 415 crore, up 164 percent QoQ from Rs. 157 crore and 20.3 percent YoY from Rs. 345 crore. The sharp sequential improvement in profitability also aligns with a 3-year profit CAGR of 2 percent and a healthy 3-year ROE CAGR of 8 percent, indicating steady long-term value creation.
Indian Power Sector FY 2025
India’s power sector saw steady growth in FY2025, with power demand rising by 4.2 percent to 1,694 BU. The country added 33.2 GW of capacity during the year, with renewable energy (RE) forming a significant portion at 28.7 GW, driven largely by solar and wind.
Total installed capacity reached 475 GW, with thermal sources still dominating at 247 GW. The peak power demand touched 250 GW in May 2024. On the pricing side, the average merchant tariff declined to Rs. 4.47/unit in FY25 from Rs. 5.24 in FY24, reflecting easing market conditions. This shift shows India’s accelerating transition towards cleaner and more cost-efficient power generation.
Written By Fazal Ul Vahab C H
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