JSW Energy Secures Two Major Deals, Fueling Expectations of Share Price Surge. Brokerage Issues BUY Rating, Predicting ₹530 Target in 3-6 Months.
JSW Energy Stock Outlook: JSW Energy Limited completed two significant acquisitions in early 2025, substantially bolstering the company's business growth prospects and investor returns. On March 4th, 2025, the company acquired KSK Mahanadi Power Company, a fully operational 1,800-megawatt thermal power plant. Furthermore, on April 9th, JSW Energy finalized a deal with O2 Power for a renewable energy capacity of 4,696 megawatts.
Renewable Energy to Provide Stable Revenue
The O2 Power deal includes 2,259 megawatts of capacity scheduled to become operational by June 2025, generating an estimated annual EBITDA of approximately ₹1,500 crore. Remaining projects are expected to be operational by 2027, potentially increasing EBITDA to ₹3,750 crore. This electricity will be sold to government entities like SECI, NTPC, and SJVN, known for their timely payments—ensuring a significant degree of security for JSW's income.
Strong Foothold in Thermal Power
The KSK Mahanadi thermal plant's entire 1,800-megawatt capacity is already operational, with customer contracts already finalized. This translates to immediate benefits for JSW from this acquisition. Additionally, the company commissioned a new 284-megawatt wind project and the Utkal Unit-2 in Q4FY25. JSW's operational capacity now stands at 10.9 gigawatts, projected to reach 14 gigawatts by June 2025.
Growth Plan: JSW Already Exceeds 2030 Target
JSW Energy had set a target of 20 gigawatts of capacity by 2030; however, recent deals have increased its locked-in capacity to 28.3 gigawatts. Furthermore, the company aims for 5 gigawatts/40 GWh in energy storage.
Strong Q4FY25 Results Anticipated
According to brokerage houses, JSW's earnings could see a year-on-year growth of 16.8% and a quarter-on-quarter growth of 31.9% in Q4FY25. EBITDA is also projected to increase by 10.1% year-on-year and 40.9% quarter-on-quarter. This is attributed to rising electricity demand, the addition of new projects, and increased electricity prices in the open market.
Benefiting from Demand Spike
Total electricity consumption in India during January-March 2025 reached 416 billion units, compared to 400 billion units during the same period last year. Early onset of summer pushed February demand to 238 gigawatts. The average electricity price on the IEX market reached ₹4.4/unit, up from ₹3.7/unit in the previous quarter. JSW sells approximately 28% of its electricity in the merchant market, directly benefiting from this price increase.
Brokerage Confidence: BUY Rating and ₹530 Target
Axis Securities has assigned a BUY rating to JSW Energy. They believe the combination of rising summer demand, increased plant capacity, and the recent dip in share price presents a compelling investment opportunity.
The share is currently trading near ₹482, with the brokerage projecting a price target of ₹530 within the next 3-6 months.
(Disclaimer: This report is prepared for informational purposes only. Consult your financial advisor before making any investment decisions.)
