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    JSW Energy

    JSWENERGY
    Power·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

    6
    • 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

    3
    • 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.

    What Changed1

    vs Q2 FY26

    Risks discussed4 → 3 (-1)
    Key financials

    Metrics

    8

    Periods

    3

    Headline

    3
    • Net Debt
      ₹44,000 Cr
    • Net Debt to Pro Forma EBITDA
      5 x
    • Weighted Average Cost of Debt
      9.1%

    Q4

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

    FY25

    2
    • EBITDA
      ₹6,115 Cr
      YoY+5%
    • PAT
      ₹1,950 Cr
      YoY+13%

    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

    Mix2 others
    • Under Construction Generation Projects37.4%
    • Project Pipeline (LOI/LOA secured)16.2%

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

    5
    high confidence
    CategoryHeadline
    Capex

    ₹15,000 crores

    cut — Because of certain delays in some of the ongoing projects and because we were accelerating the inorganic growth pipeline, we calibrated it down.

    Debt

    Net ₹44,000 crores · 5.0x EBITDA

    Cost 9.0%

    M&A

    KSK Mahanadi Power

    acquisition · closed · Consideration ₹NaN (cash)

    M&A

    O2 Power

    acquisition · closed · Consideration ₹NaN (cash)

    Liquidity

    Liquidity disclosed

    Treasury income gain was partly due to high cash and liquidity carried on the books.

    Guidance & targets

    8
    CategoryTargetPriority
    Capacity
    Generation Capacity
    30 GW
    High
    Capacity
    Energy Storage Capacity
    40 GWh
    High
    Capacity
    O2 Power Operational Capacity
    4.7 GW
    High
    Capacity
    Organic Capacity Addition
    3-3.5 GW per year
    High
    Profitability
    EBITDA Growth
    2.7x-3.0x
    High
    Capex
    Total Capex
    ₹1,30,000 crore
    High
    Capex
    FY26 Capex
    ₹15,000-18,000 crores
    High
    Debt
    Net Debt to Pro Forma EBITDA
    below 5.5x
    Medium

    KSK Mahanadi debt cost reduction

    June quarter
    CurrentWeighted average cost of debt at ~9.05%
    TargetReduction 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.

    How to verify

    capital_allocation.debt.cost_of_debt_pct

    Risks & concerns

    3
    RiskSeverity

    CTU connectivity challenges for the industry

    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.Management acknowledged

    medium

    Impact of wind speeds on PLF for acquired assets

    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.Management acknowledged

    medium

    Delays in BESS project commissioning due to pending regulatory approvals

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

    low

    Q&A highlights

    8

    “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

    3 min read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.