Motilal Oswal Financial Services (MOSL) has revised its rating for JSW Energy shares to 'Neutral', a decision announced after the power company released its first-quarter earnings for FY27. The brokerage highlighted a significant 17% rally in the stock over the past four months, leading to reduced valuation comfort.
MOSL also adjusted its FY28 EBITDA estimates for JSW Energy downwards by 9%. This revision primarily reflects a slower pace of renewable energy commissioning, with the firm now projecting 4GW by FY28, less than its previous assumptions. The brokerage's new target price of Rs 550 implies a 2% potential downside from recent trading levels.
"Our revised TP of Rs 550 implies a 2% downside, prompting us to downgrade the stock to Neutral. While the company's long-term growth outlook remains compelling, we believe the current valuation adequately reflects these strengths," MOSL stated.
Q1 FY27 Financial Overview
For the first quarter of fiscal year 2026-27, JSW Energy reported a net profit of Rs 532 crore, marking a 36% decrease from Rs 835 crore recorded in the same quarter of the previous fiscal year. Revenue for the quarter saw a marginal increase, rising to Rs 5,437 crore from Rs 5,411 crore year-over-year.
The company's net debt decreased to Rs 61,322 crore as of June 30, 2026, a reduction attributed to recent fundraising activities. However, power sales experienced a 5% decline, totaling 12.9 billion units (BUs) during the quarter.
Generation Breakdown
- Thermal generation: Fell 6% to 8 BUs, primarily due to lower output at its Mahanadi plant.
- Renewable energy generation: Decreased 3% to 4.8 BUs, impacted by weaker hydrology affecting hydro plants.
- Net long-term PPA sales: Declined 4% to 11.2 BUs.
- Short-term thermal sales: Remained flat at 1.6 BUs.
In the trading session prior to the announcement, JSW Energy shares closed at Rs 561.75, with the company's market capitalization standing at Rs 1.03 lakh crore.