JSW Energy — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

JSW Energy delivered strong operational performance in Q2 FY26 with significant growth in net generation and installed capacity, and H1 EBITDA surpassing the previous fiscal year. The company advanced its strategic vertical integration and capacity expansion through key acquisitions and new PPA signings. However, PAT saw a decline due to increased finance costs and depreciation, while the merchant market remained soft and renewable PPA signings faced delays.

Highlights

  • Net generation in Q2 FY26 surged 52% YoY to 14.9 billion units, significantly contributing to revenue growth.

  • Total installed capacity reached 13.2 GW, marking a remarkable 71% YoY growth.

  • H1 FY26 EBITDA of over ₹6,200 crores exceeded the EBITDA generated in the entire last fiscal year.

  • Strategic acquisitions of GE Power India's Boiler Manufacturing Business and a majority stake in KSK Water Infrastructure enhance vertical integration and future expansion capabilities.

  • New PPAs for 230 MW under SECI FDRE IV and 100 MW solar with 100 MWh Battery Energy Storage System were signed, bolstering the long-term portfolio.

Concerns

  • Profit After Tax (PAT) for Q2 FY26 declined 17% YoY to ₹705 crores, primarily due to higher interest and depreciation from new asset capitalization.

  • The merchant power market remained soft, with day-ahead prices averaging $3.92 per unit, impacted by record capacity additions and muted demand.

  • A slowdown in PPA signings for renewable LOAs was noted, with 900 MW of pure solar capacity pending, posing a challenge for timely conversion.

Key financials

2 periods

Headline

  • Total Revenue
    ₹5,300 Cr
    YoY +55%
  • EBITDA
    ₹3,200 Cr
    YoY +67%
  • PAT
    ₹705 Cr
    YoY -17%
  • Cash Profits
    ₹1,500 Cr
    YoY +27%

H1

  • EBITDA
    ₹6,200 Cr
  • PAT
    ₹1,450 Cr
    YoY +5%
  • Cash Profits
    ₹3,000 Cr

What they filed

Q1 FY27: revenue up 20.2%, net profit up 16.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue967 977 946 916 780 −19%695 −29%639 −32%1,101 +20%
EBITDA250 305 277 303 259 +4%244 −20%209 −25%296 −2%
Net profit286 217 464 162 190 −34%65 −70%442 −5%188 +16%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

12,500 MW

as of 2025-09-30 quantified

Execution

Upon completion, installed capacity will nearly double to approximately 26 GW.

Composition

Mix 3 future pipelines
  • Salboni (bagged last fiscal) 1,600 MW 42.1%
  • KSK brownfield expansion optionality 1,800 MW 47.4%
  • Utkal LOA 400 MW 10.5%

Share of order book by future pipeline, derived from disclosed amounts

Pipeline

L1 awaiting loa

Renewable LOAs pending PPA signing (company specific) and industry-wide LOAs pending PPA signing

The company's under-construction portfolio of 12.5 GW is fully tied up with long-term PPAs. New PPAs and acquisitions this quarter further strengthen the pipeline. However, there is a slowdown in signing PPAs for renewable LOAs, with 900 MW of pure solar pending.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹3,500 Cr this quarter · ₹1,30,000 Cr (by 2030) planned
    • Ongoing projects like Kutehr and some RE projects
    The total amount of CAPEX that we have spent in this quarter is about Rs. 3,500 crores. We have also capitalized some amount on ongoing projects like Kutehr and some RE projects
  • Debt Net ₹62,000 Cr · 5.0× EBITDA
    • Rate reset Weighted average cost of debt marginally came down, then went up by ~10 basis points sequentially.
    From a balance sheet point of view, the net debt at the end of September quarter stood at close to Rs. 62,000 crores... the total debt to the total EBITDA on a TTM basis stood at just under 5x.
  • M&A GE Power India Ltd.'s Boiler Manufacturing Business Acquisition · Signed

    Enhances in-house capabilities with technology and people, critical for equipment manufacturing and supporting thermal power expansion plan.

    We have entered into a Scheme of Arrangement with GE Power India Ltd. to acquire its boiler manufacturing business.
  • M&A KSK Water Infrastructure Acquisition · Closed

    Ensures raw water supply to 1,800 MW KSK Mahanadi Thermal Power Plant and supports an additional 1,800 MW expansion.

    We have successfully completed the acquisition of a majority stake in KSK Water Infrastructure.
  • M&A 150 MW Tidong Hydro Power Plant from Statkraft Acquisition · Signed · Consideration ₹1,728 (cash)

    Strengthens hydro portfolio, brings skilled team, and has a 22-year PPA for 75 MW with Uttar Pradesh Power Corporation.

    we have signed a definitive agreement to acquire the 150 MW Tidong Hydro Power Plant from Statkraft at an enterprise valuation of ₹1,728 crore.

Guidance & targets

Capacity

  • Installed Capacity Capacity · by end of fiscal year · High confidence 15 GW
    With 2.3 GW of capacity already added in H1 FY26, we are well-positioned to achieve our generation capacity target in excess of 15 GW by the end of fiscal year.

    — Pritesh Vinay

  • Installed Capacity Capacity · upon completion of under-construction projects · High confidence 26 GW
    Upon completion, our installed capacity will nearly double to approximately 26 GW.

    — Sharad Mahendra

  • Total Capacity Capacity · by 2030 · High confidence 30 GW
    We had earlier guided for a capital expenditure of ₹1,30,000 crore by 2030 to achieve a capacity of 30 GW and 40 GWh of energy storage.

    — Sharad Mahendra

Energy Storage

  • Energy Storage Capacity Energy Storage · by 2030 · High confidence 40 GWh
    We had earlier guided for a capital expenditure of ₹1,30,000 crore by 2030 to achieve a capacity of 30 GW and 40 GWh of energy storage.

    — Sharad Mahendra

  • Battery Assembly Plant Operationalization Energy Storage · Q3 FY26 · High confidence Operational
    This facility, dedicated to supporting Battery Energy Storage Systems (BESS), is expected to be operational in Q3 FY26.

    — Sharad Mahendra

Thermal Capacity (Industry)

  • Total Thermal Capacity in India Thermal Capacity (Industry) · by FY32 · High confidence 300 GW
    With this, India's total thermal capacity in FY32 should reach close to 300 GW.

    — Sharad Mahendra

Manufacturing

  • Boiler Manufacturing Capacity Manufacturing · per annum · Medium confidence 1.5 boilers worth of components
    this has a capacity of almost 1.5 boiler worth of component manufacturing.

    — Sharad Mahendra

  • Turbine Generator Manufacturing Capacity Manufacturing · per year · High confidence 2 turbine generators (1.66 GW)
    JSW Toshiba can produce comfortably 2 turbine generators in a year... 800 MWs means 1.66 GWs every year with the potential to go to 2.4 GW also.

    — Sharad Mahendra

What to watch in Q3 FY26

Renewable PPA Signings

next quarter
Current 900 MW of pure solar LOAs pending PPA signing
Target Progress on signing PPAs for 900 MW pure solar LOAs

Why it matters

Conversion of LOAs to firm PPAs is crucial for realizing renewable capacity targets and revenue visibility.

total solar, if you see, is 900 MWs of capacity which is pending, which is contracted and not signed.

Risks & concerns

  • Grid curtailment for Renewable Energy

    medium

    Capacity evacuation challenges due to high RE additions, especially solar. Management states PPA-backed projects under GNA are protected, but it's a watch item for 1-3 years until new connectivity improves.

    there is a capacity evacuation challenges grid has started facing... but not I will say on a permanent basis, temporarily maybe for the next 1 year, 2 year, 3 years till the time the new connectivity, the work in progress which is there comes and the evacuation is there

    Management acknowledged

  • Soft Merchant Power Market

    medium

    Day ahead prices averaged $3.92 per unit, impacted by record capacity additions and muted demand. Company has de-risked by tying up Vijayanagar plant with JSW Steel and securing Utkal LOA.

    The merchant market remained soft, with day ahead prices averaging 3.92 per unit on exchanges, declining both sequentially and annually, impacted by record capacity additions and muted demand.

    Management acknowledged

  • Slowdown in Renewable PPA Signing

    medium

    900 MW of pure solar LOAs are pending PPA signing, with no specific timeline for resolution. This impacts the conversion of pipeline into operational capacity.

    total solar, if you see, is 900 MWs of capacity which is pending, which is contracted and not signed.

    Management acknowledged

  • Higher Interest and Depreciation from New Assets

    medium

    PAT declined 17% due to increased interest and depreciation expenses associated with the capitalization of newer assets.

    With the additional capitalization of newer assets, that have come on the balance sheet, there is a higher interest and depreciation commensurately, which has led to the profit after tax being down by 17% compared to last year at about Rs. 705 crores

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Lower EBITDA in Karcham and Baspa Hydro Plants Direct
on a YoY basis, the incremental amount of free power which earlier last year we were selling in the merchant market is now being supplied to Government of Himachal Pradesh under the implementation agreement.

Explains the impact of regulatory changes on revenue from hydro assets, shifting from merchant sales to state supply.

Asked by Mohit Kumar

Acquisition of GE Power India's Boiler Manufacturing Business Direct
our strategy was to ensure the timely supplies of the boiler for our, especially the Salboni plant which we have PPA which we have signed. So, it is the technology is there. The skill set to do the people are there. The engineering team is there so that these are the prime reasons that we have gone for this.

Clarifies the strategic rationale behind the acquisition, focusing on vertical integration and ensuring timely supplies for thermal expansion projects.

Asked by Mohit Kumar

Grid Curtailment Risk for RE Capacities Partial
there is a capacity evacuation challenges grid has started facing... if there is a PPA with an entity and if the scheduling is within the PPA terms, even if there is a curtailment in the grid, the regulation protects the developers and they get the money.

Addresses a key industry-wide concern regarding RE integration, highlighting regulatory protection for PPA-backed projects under GNA, but acknowledging it as a watch item.

Asked by Sumit Kishore

RE Bidding Trends and Future Outlook Direct
plain vanilla solar or vanilla wind bids are hardly any. They are not there. More it is coming is either hybrid... Majority is solar plus battery energy storage to discharge during the evening hours.

Provides insight into the evolving landscape of renewable energy bidding, indicating a shift towards more integrated and dispatchable solutions.

Asked by Atul Tiwari

BESS CAPEX and Tariff Economics Evasive
I am struggling how to respond to this because when there is a sourcing or a procurement decision, a lot also depends on, A-what is the prevailing price at that point of time, what is your negotiating strategy vis-a-vis multiple suppliers... I am afraid there is no one size fits all.

Management declined to provide specific financial details on BESS, citing competitive reasons and variability, indicating sensitivity around this emerging segment's economics.

Asked by Nikhil Jain

Slowdown in Renewable PPA Signing Direct
there is a pendency of 40 GW of bids which are LOA issued and PPA pending for signing. So, we cannot give any timeline for this whether it is 3 months, 6 months, 1 year... So, we don't see, and for us it is the total capacity for which we have received pure solar, which we see as a challenge, is only 900 MWs out of our total 4 GW which is there, which is a mix of many, but total solar, if you see, is 900 MWs of capacity which is pending, which is contracted and not signed.

Highlights a significant challenge in converting LOAs to firm PPAs, specifically for 900 MW of pure solar, impacting the pace of renewable capacity addition.

Asked by Mahesh Patil

Barmer EBITDA decline due to regulatory changes Direct
Barmer completed its 12 years, last year. So, this year onwards there is a step down under the regulatory trajectory of the capacity charge recovery because of the change in the rate of depreciation.

Explains the reason for a decline in EBITDA for a specific asset due to regulatory depreciation changes, which will persist for the current fiscal year.

Asked by Aniket Mittal

3 min read 6 chapters

Detailed narrative

Robust Capacity Expansion and Generation Growth

JSW Energy demonstrated strong operational growth in Q2 FY26, with net generation increasing by 52% YoY to 14.9 billion units. This performance contributed to a 60% YoY rise in H1 FY26 generation, reaching 28.4 billion units. The company's total installed capacity expanded significantly by 71% YoY, reaching 13.2 GW by September 2025, driven by both organic additions like Kutehr (240 MW hydro) and strategic acquisitions such as KSK and O2 Power.

Strategic Acquisitions and Vertical Integration Initiatives

The quarter saw several strategic moves aimed at strengthening JSW Energy's portfolio and supply chain. The company acquired GE Power India's Boiler Manufacturing Business to enhance in-house thermal equipment capabilities and a majority stake in KSK Water Infrastructure to secure raw water supply for its Mahanadi plant. Additionally, JSW Energy acquired the 150 MW Tidong Hydro Power Plant from Statkraft for ₹1,728 crore, further bolstering its hydro assets and PPA profile.

Advancing Renewable Energy and Storage Pipeline

JSW Energy is actively building a substantial 12.5 GW of generation projects, all secured by long-term Power Purchase Agreements, which are expected to nearly double its installed capacity to 26 GW upon completion. During the quarter, new PPAs were signed for 230 MW under SECI FDRE IV and 100 MW solar with 100 MWh Battery Energy Storage System. The company is also establishing a 5 GWh per annum battery assembly plant in Pune, anticipated to be operational by Q3 FY26, and is nearing commissioning of its 3,800 TPA green hydrogen project at Vijayanagar.

Financial Performance Overview

For Q2 FY26, JSW Energy reported a 55% YoY increase in total revenue to over ₹5,300 crores and a 67% YoY rise in EBITDA to ₹3,200 crores. The H1 FY26 EBITDA of over ₹6,200 crores surpassed the entire previous fiscal year's EBITDA. However, Profit After Tax (PAT) for the quarter declined 17% YoY to ₹705 crores, primarily attributed to higher interest and depreciation expenses from newly capitalized assets. Net debt stood at ₹62,000 crores at quarter-end, with a TTM net debt to EBITDA ratio under 5x, and receivables improved to 64 days outstanding.

Challenges in Merchant Market and PPA Conversion

The merchant power market remained soft, with day-ahead prices averaging $3.92 per unit, influenced by significant capacity additions and subdued demand. While JSW Energy has de-risked its portfolio through strategic tie-ups for its Vijayanagar plant and an LOA for Utkal, the company noted a slowdown in PPA signings for renewable LOAs, with 900 MW of pure solar capacity pending. Grid curtailment challenges for renewable energy were also acknowledged, though PPA-backed projects under GNA are protected.

Regulatory Environment and Future Outlook

Recent GST rationalization is viewed positively, expected to lower capital costs for renewables and reduce fuel costs for thermal plants. Management observed a shift in RE bidding towards hybrid and solar+BESS solutions, anticipating lower plain vanilla bidding volumes this year but a pick-up from the next fiscal year. The company reiterated its long-term target of achieving 30 GW capacity and 40 GWh energy storage by 2030, maintaining a mid-to-high-teen Internal Rate of Return (IRR) hurdle rate for new projects.

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