JSW Energy — Q4 FY25 earnings call

Call held 15 May 2025

Management summary

JSW Energy reported a strong Q4 and FY25, achieving record annual EBITDA and PAT, driven by significant capacity additions and strategic acquisitions. The company surpassed its 10 GW capacity target and launched an ambitious Strategy 3.0 to reach 30 GW generation and 40 GWh energy storage by 2030, backed by substantial capex plans. While debt costs saw a slight sequential increase, management expressed confidence in its leverage profile and execution capabilities for its robust pipeline.

Highlights

  • Annual EBITDA reached ₹6,115 crores, up 5% YoY, marking the highest ever for the company.

  • Annual PAT reached ₹1,951 crores, up 13% YoY, also a record high.

  • Q4 net generation increased 24% YoY to 7.9 billion units, driven by a 32% YoY increase in renewable generation.

  • Successfully acquired KSK Mahanadi (3,600 MW) for ₹16,084 crore and O2 Power (4.7 GW RE platform) for ₹12,468 crore, significantly expanding the portfolio.

  • Improved KSK Mahanadi's PLF to 79% within 25 days of operations post-acquisition, from an FY25 average of 67%.

  • Expanded locked-in energy storage capacity to 28.3 GWh, with a new 12 GWh PSP project PPA signed with UPPCL.

Concerns

  • Weighted average cost of debt increased by ~18 bps sequentially to ~9.05%.

  • Days Sales Outstanding (DSO) increased to 76 days compared to March last year, though attributed to a higher proportion of power sold on credit period.

  • Plans for a solar manufacturing plant have been kept in abeyance for the current fiscal due to changes in supply chain dynamics.

Key financials

3 periods

Headline

  • Net Debt
    ₹44,000 Cr
  • Net Debt to Pro Forma EBITDA
    5×
  • Weighted Average Cost of Debt
    9.1%

Q4

  • Total Topline
    ₹3,500 Cr
    YoY +21%
  • EBITDA
    ₹1,512 Cr
    YoY +17%
  • PAT
    ₹408 Cr
    YoY +16%

FY25

  • EBITDA
    ₹6,115 Cr
    YoY +5%
  • PAT
    ₹1,950 Cr
    YoY +13%

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

30.2 GW

as of 2025-03-31 quantified

Execution

Projects under construction are within PPA timelines, typically 18 months for energy storage projects.

Composition

Mix 2 others
  • Under Construction Generation Projects 37.4%
  • Project Pipeline (LOI/LOA secured) 16.2%

Share of order book by other· partial disclosure (53.6% of the book)

The company has a robust pipeline and locked-in capacity, with all under-construction projects fully tied up under long-term PPAs, ensuring strong future visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹15,000 Cr Cut — Because of certain delays in some of the ongoing projects and because we were accelerating the inorganic growth pipeline, we calibrated it down.
    • Total CAPEX for FY25 ₹8,000 Cr
    • Capex for O2 Power to scale to 4.7 GW by June 2027 ₹13,000 Cr
    • BESS CAPEX (not significant) ₹10 Cr

    Previously planned ₹15,000 Cr

    So Sumit, what we actually ended up incurring as a total CAPEX for fiscal '25 was about Rs. 8,000 crores. And if you remember, we had started, we were guided for Rs. 15,000 CAPEX for the year. Because of certain delays in some of the ongoing projects and because we were accelerating the inorganic growth pipeline, we calibrated it down. For fiscal 2026, we are expecting to end up spending anything between Rs. 15,000 crores to Rs. 18,000 crores in that range to complete the ongoing projects plus the pipeline of new growth projects that have started.
  • Debt Net ₹44,000 Cr · 5.0× EBITDA Cost 9%
    • Rate reset Weighted average cost of debt went up by almost 18 bps sequentially to 9.05%. KSK acquisition debt priced for BBB, achieved higher rating, so cost will come down in June quarter. Project finance debt linked to bank reference rate with annual resets.
    If you look at the net debt for the quarter, at the end of the quarter post completion of the KSK acquisition, the total net debt stood at about Rs. 44,000 crores, out of which about Rs. 9,500 crores was for projects which are under capital work in progress, and almost Rs. 34,500 crores was the leverage sitting on the operating companies.
  • M&A KSK Mahanadi Power Acquisition · Closed · Consideration ₹[object Object] (cash)

    Largest thermal asset acquired via NCLT proceedings, strengthening base load portfolio.

    Reported FY25 EBITDA of ₹2,895 crore (PLF 67.4%), underlying EBITDA of ₹2,382 crore. PLF improved to 79% post-transaction.

    KSK Mahanadi is 3,600 MW plant and is the largest thermal asset acquired via NCLT proceedings for a total resolution amount of ₹ 16,084 crore. Currently 1,800 MW is operational which is 95% tied up under PPAs and has fuel supply agreements. In FY2025 the plant reported full year reported EBITDA of 2,895 crore on a PLF of 67.4% while the underlying EBITDA stands at 2,382 Crore. We have improved PLF to 79% from FY25 average of 67% post completion of the transaction that is within 25 days of our operations in the month of March.
  • M&A O2 Power Acquisition · Closed · Consideration ₹[object Object] (cash)

    Acquisition of a 4.7 GW RE platform to accelerate renewable energy growth.

    Current installed capacity of 1.3 GW, expected to scale to 4.7 GW by June 2027 with ₹13,000-14,000 crore capex.

    In another large transaction we acquired O2 Power a 4.7 GW RE platform. The total consideration paid for O2 Power is 12,468 crore. The current installed capacity of O2 is 1.3 GW and we expect it to scale to 4.7 GW by June 2027 by undertaking capital expenditure of 13,000-14,000 crore.
  • Liquidity Liquidity disclosed Treasury income gain was partly due to high cash and liquidity carried on the books.
    And the second is a treasury income gain as you rightly said because of the high cash and liquidity that we carried on the books.

Guidance & targets

Capacity

  • Generation Capacity Capacity · by 2030 · High confidence 30 GW

    Previously 10 GW → 30 GW

    I am happy to announce and we're launching Strategy 3.0, our new roadmap to achieve 30 GW of generation capacity and 40 GWh of energy storage by 2030.

    — Sharad Mahendra

  • Energy Storage Capacity Capacity · by 2030 · High confidence 40 GWh

    — Sharad Mahendra

  • O2 Power Operational Capacity Capacity · by June 2027 · High confidence 4.7 GW

    From 1.3 GW today

    The current installed capacity of O2 is 1.3 GW and we expect it to scale to 4.7 GW by June 2027 by undertaking capital expenditure of 13,000-14,000 crore.

    — Sharad Mahendra

  • Organic Capacity Addition Capacity · ongoing · High confidence 3-3.5 GW per year
    See, as we say that from, we are talking it is 12.2 gigawatts operating portfolio and the projects which are in pipeline and to be executed within the PPA timelines, you can assume that beyond 12.2 gigawatt, maybe 3-3.5 gigawatt of capacity addition, around 3.5 gigawatt of capacity addition in a year ensures us to meet and deliver the projects on time.

    — Sharad Mahendra

Profitability

  • EBITDA Growth Profitability · by FY30 · High confidence 2.7x-3.0x
    By FY30, we expect our EBITDA on a run-rate basis to grow 2.7x-3.0x over FY25 proforma EBITDA levels.

    — Sharad Mahendra

Capex

  • Total Capex Capex · FY26 and FY30 · High confidence ₹1,30,000 crore
    To support this, we plan to invest ₹1,30,000 crore in capital expenditure between FY26 and FY30.

    — Sharad Mahendra

  • FY26 Capex Capex · FY26 · High confidence ₹15,000-18,000 crores
    For fiscal 2026, we are expecting to end up spending anything between Rs. 15,000 crores to Rs. 18,000 crores in that range to complete the ongoing projects plus the pipeline of new growth projects that have started.

    — Pritesh Vinay

Debt

  • Net Debt to Pro Forma EBITDA Debt · ongoing · Medium confidence below 5.5x
    In continuation when you mentioned that the net debt to pro forma is 5x, so in terms of your comment regarding the pacing of growth in all circumstances, you would keep below the 5.5x net debt to pro forma EBITDA is the understanding we have. That is the endeavor, Sumit.

    — Sharad Mahendra

What to watch in Q1 FY26

KSK Mahanadi debt cost reduction

June quarter
Current Weighted average cost of debt at ~9.05%
Target Reduction in cost of debt for KSK Mahanadi

Why it matters

A reduction in debt cost for the recently acquired KSK Mahanadi will positively impact the company's overall financing expenses and profitability.

And hence, when we report in June quarter, you will see this number coming down because that number has already inched down because the credit rating is better than the base case at which it was priced.

Risks & concerns

  • CTU connectivity challenges for the industry

    medium

    The industry faces challenges in securing Central Transmission Utility (CTU) connectivity, but JSW Energy has a strategy to mitigate this by focusing on state-level connectivity and leveraging acquired assets' excess connectivity.

    And also to add, which we have to reiterate again, which we said earlier, for maybe next two years, whatever projects under construction to be executed, we all know that there is a challenge in terms of getting the CTU connectivity, which in general the industry is facing.

    Management acknowledged

  • Impact of wind speeds on PLF for acquired assets

    medium

    Wind speeds have had an impact on the PLF of acquired assets, which is an uncontrollable factor, but management is focusing on improving controllable factors like O&M efficiencies and machine availability.

    Yes, see one measure which we are taking, yes, it is slightly lower. Wind speed impact is there on those assets. ... But yes, what we are now, our operations and maintenance team is working on, apart from the availability, which we have been successful in increasing the availability, which used to be 96%, 97% to 99% availability, which we have ended with, is the efficiencies of the machines which are running.

    Management acknowledged

  • Delays in BESS project commissioning due to pending regulatory approvals

    low

    The BESS project faced delays due to pending regulatory approvals, but the ordered batteries are being utilized in alternate projects, mitigating the impact.

    Yes, we had planned in such a way to commission that in 4 months' time. That was not a challenge at all because the preparatory groundwork, the way this amount which has been already invested was done judiciously that as and when the clarity comes because in that time also the regulatory approvals were pending to the PPAs were signed. And the batteries what we had ordered we have enough other projects also which we have in which is captive requirements of energy storage as well as other bids which we have won to the same batteries are being used at for other locations.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Quantification of KSK Mahanadi EBITDA improvement Evasive
Mohit, it may not be appropriate to quantify it at this point, but I think what will be better and more credible is to deliver some kind of a quarterly progress. And that will be a better way of tracking this.

Analyst sought specific numerical guidance on the expected improvement in KSK Mahanadi's EBITDA post-acquisition, but management deferred, indicating uncertainty or unwillingness to commit to a figure at this stage.

Asked by Mohit Kumar

Salboni project PPA tariff Direct
So Atul, the levelized 25-year tariff under two-part mechanism will be roughly Rs. 5.45 per kWh.

Provides a key financial metric for the new 1.6 GW Salboni thermal project, crucial for revenue and profitability projections.

Asked by Atul Tiwari

FY26 and FY27 CAPEX plans Direct
For fiscal 2026, we are expecting to end up spending anything between Rs. 15,000 crores to Rs. 18,000 crores in that range to complete the ongoing projects plus the pipeline of new growth projects that have started.

Gives clear, quantified guidance on near-term capital expenditure, which is significant for a capital-intensive sector like power.

Asked by Sumit Kishore

Net debt to pro forma EBITDA target Direct
In continuation when you mentioned that the net debt to pro forma is 5x, so in terms of your comment regarding the pacing of growth in all circumstances, you would keep below the 5.5x net debt to pro forma EBITDA is the understanding we have. That is the endeavor, Sumit.

Confirms management's commitment to maintaining a specific leverage ratio, which is a critical financial health indicator for investors.

Asked by Sumit Kishore

O2 Power connectivity and land acquisition for under-construction portfolio Partial
So we are planning projects in such a way that from a synergy point of view, some of that excess connectivity that O2 has, we will be utilizing for our own projects because now everything is JSW, right? So it's a combination of these two things which gives us a high degree of confidence in being able to commit to certain capacity targets in a certain timeline.

Analyst probed on potential bottlenecks for the large under-construction portfolio, and management provided a strategic response leveraging acquired assets' infrastructure, but did not give specific percentages for land/CTO approval.

Asked by Baranidhar

Wind PLF assumptions and P90 benchmark Direct
See, so there are 2-3 factors that go in. One is the location, particular location. Second is the type of equipment that you plan to utilize there. And what is the rating of that equipment and what are the efficiency factors, etc. So it's not a one size fits all that one P90 will work at all locations regardless of which equipment you use. And hence ultimately what works for us effectively is the LCOE number right instead of P90 that what is the levelized cost of energy that one is likely to achieve at a particular location for a given configuration machine.

Clarifies the company's conservative approach to wind PLF assumptions (P90 vs industry P75) and highlights the focus on Levelized Cost of Energy (LCOE) as a more relevant metric.

Asked by Aniket Mittal

Weighted average cost of debt trajectory Direct
So, it's a mix of things, Aniket, you know, so what has happened is that, for KSK acquisition we drew down on a long term debt which was priced at a certain level, assuming a triple B credit rating profile. We have achieved a higher than that. And hence, when we report in June quarter, you will see this number coming down because that number has already inched down because the credit rating is better than the base case at which it was priced.

Explains the recent increase in cost of debt and provides forward-looking color on potential reduction due to improved credit rating and benign rate environment, which impacts financing costs for future projects.

Asked by Aniket Mittal

O2 Power operational capacity timeline Direct
Yes, Mahesh, as I said that when we acquired the portfolio, the operating capacity was 1.34 gigawatt. And the balance work, which is in progress, so by quarter end we are expecting close to 1.9 gigawatt operational capacity and about 300 megawatt of solar which is spilling over in Quarter 2. That is the only minor change which is there.

Provides an updated, slightly revised timeline for O2 Power's operational capacity, indicating a minor delay for a portion of the planned additions.

Asked by Mahesh Patil

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Detailed narrative

Record Financial Performance and Capacity Growth

JSW Energy achieved its highest ever annual EBITDA of ₹6,115 crores in FY25, representing a 5% YoY growth, and a record annual PAT of ₹1,951 crores, up 13% YoY. The company surpassed its Strategy 2.0 target of 10 GW, reaching an operational capacity of 12.2 GW. In FY25 alone, 3.6 GW of operational capacity was added, including 1.7 GW organically, with 1.3 GW being organic wind capacity, which accounted for one-third of India's total wind capacity additions for the year.

Strategic Acquisitions and Integration

The company strategically expanded its footprint through two major acquisitions: KSK Mahanadi Power (3,600 MW) for ₹16,084 crore and O2 Power (4.7 GW RE platform) for ₹12,468 crore. KSK Mahanadi, with 1,800 MW already operational, saw its PLF improve to 79% within 25 days of JSW Energy's operations, up from an FY25 average of 67%. O2 Power, currently at 1.3 GW installed capacity, is expected to scale to 4.7 GW by June 2027 with a planned capital expenditure of ₹13,000-14,000 crore.

Ambitious Growth Strategy 3.0

Building on its past achievements, JSW Energy launched Strategy 3.0, setting an ambitious roadmap to achieve 30 GW of generation capacity and 40 GWh of energy storage by 2030. This '30 by 30' vision underscores the company's commitment to India's energy security. The company's locked-in capacity currently stands at 30.2 GW, including 11.3 GW under construction and a robust pipeline of 4.9 GW where PPAs are yet to be signed.

Optimizing Untied Capacity and Energy Storage

The Vijayanagar thermal plant is now fully tied up, reducing the company's untied capacity to approximately 976 MW, with 790 MW based on domestic coal, thereby reducing exposure to global coal price volatility. In energy storage, the locked-in capacity expanded to 28.3 GWh, including the 12 GWh Bhavali hydro pumped storage project under implementation. A new PPA for another 12 GWh PSP project with UPPCL was signed in Q1 FY26, slated for delivery in the next six years.

Capital Expenditure and Debt Management

The company plans to invest ₹1,30,000 crore in capital expenditure between FY26 and FY30 to support its growth targets. For FY26, the expected capex is between ₹15,000-18,000 crores. Net debt post-KSK acquisition stood at approximately ₹44,000 crores, resulting in a net debt to pro forma EBITDA ratio of ~5x, with an endeavor to keep it below 5.5x. The weighted average cost of debt increased sequentially by ~18 bps to ~9.05%, but management expects it to come down due to improved credit ratings for acquired assets.

Operational Efficiencies and Wind Performance

Despite the impact of lower wind speeds on PLF in the past year, JSW Energy's operations and maintenance team has focused on improving efficiencies and machine availability, increasing it from 96-97% to 99%. The company is also renegotiating medium-term O&M contracts and transitioning to Self-O&M for some assets, expecting significant savings in the current fiscal. The thermal portfolio maintained healthy PLFs of 77% in Q4 and 71% for the full year.

Sourcing and Manufacturing Strategy

To de-risk and optimize cost and delivery for its wind capacity additions, JSW Energy has signed a technology license agreement with Sany, with suppliers operating from Pune starting in Q2. Additionally, the company is setting up two blade manufacturing units for its captive requirements, expected to be commissioned in the current year. For solar, the company is procuring modules locally, leveraging the ample 100 GW manufacturing capacity available in India, thus facing no sourcing challenges.

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