Mar'25 View on JSW Energy Ltd

JSW Energy Ltd and its subsidiaries are primarily engaged in the business of generation of power from its power assets located at Karnataka, Maharashtra, Nandyal and Salboni. It is the holding company for the JSW group's power business. The company also has a JV company engaged in mining activities and an associate engaged in manufacturing of turbines. though the stock has made a strong recovery from 420 level and is now at 540 level, it looks like will fall below 400 level on back of following inputs • JSW reported a weak Q3FY25 EBITDA of Rs913.7 cr that declined 18% yoy, largely impacted by lower short-term tariffs. • EBITDA contribution from new renewable capacity remaining weak. • Weak PLFs impacted generation in the quarter at 6.8 BU (up 10% yoy). • Lower merchant sales and weak renewable generation affect Q3FY25 earnings. • JSW Energy is aggressively pursuing new acquisitions, announced 2 acquisitions. • Valuations remain steep at 3X P/B despite the recent correction. • CMP is not fully factoring the risk from execution slipups. • Maintain SELL with a revised SoTP-based FV of Rs370.