2025-05-15-Jefferies-JSW能源（JSW）_息税折旧摊销前利润符合预期；执行将推动上行_14页_724kb

JSW Energy Equity Research Summary

Company Overview:
JSW Energy is a subsidiary of the JSW Group, operating in India's power sector with a focus on generation, transmission, and mining. It has a installed capacity of 10.9 GW as of 4QFY25, with targets to reach 30 GW by FY30E through acquisitions and new projects.

Financial Performance:

• Currently, EBITDA stands at Rs52,208 crore for FY25, with an expected 57.5% year-on-year growth to Rs129,713 crore by FY27E. The EBITDA margin improved to 44.4% in FY25 from 39.6% in FY24.
• Adjusted PAT reached Rs19,511 crore in FY25, growing 20.7% YoY, driven by a negative tax rate. EPS increased by 13.9% to Rs18.7 in FY27E, with a 29% CAGR over FY25-27E.
• Financials show improving ROE and ROCE, reaching 10.0% and 8.9% in FY27E projections. Net debt-to-EBITDA peaked at 8.3x in FY25 but is expected to decline to 5.2x by FY30E.

Future Outlook:

• Capacity expansion: Acquisitions like KSK (1.8 GW operational by FY25) and O2 Power (2.259 GW under construction) are expected to boost operational capacity to 24.7 GW by FY30E, with renewable energy (RE) share rising from 38% to 75%.
• Revenue and PAT are projected to grow at 21% and 17% CAGRs over FY25-30E, respectively, reaching Rs350,000 crore in revenue and Rs60,000 crore in profit. Merchant power realizations improved from Rs4.29/unit in Q3FY25 to Rs5.97/unit, up YoY.
• Execution is key for upside, with plans to add more capacity by tying 860 MW with JSW Group. Sustainability efforts include transitioning coal-based boilers and meeting emission standards.

Investment Recommendation:

• Jefferies maintains a "Buy" rating with a price target of INR700 (47% upside from current INR475.05), based on 15x EV/EBITDA multiple for FY27E. The thesis includes robust balance sheet, strategic acquisitions, and capacity growth.
• Downside risks: Execution delays and aggressive bidding could impact results. Valuation factors include net debt levels and regulatory challenges.

Valuation and Risk:

• Current market cap is Rs828.6 billion. Key risk metrics show net debt/EBITDA peaking at 8.3x in FY25 but stabilizing at 5.2x by FY30E. ROE is projected at 10.6% in FY27E.
• Sustainability aspects: Focus on reducing emissions, with targets for zero incidents and green energy investments. Catalysts include potential forays into hydro pumped storage and hydrogen production.

Key Metrics:

• Capacity growth: From 10.9 GW in FY25 to 30 GW by 2030. EBITDA CAGR 57% over 2025-27, EPS CAGR 29%. Financial stability allows pursuit of growth opportunities despite higher debt from acquisitions.