JSW Energy's 2QFY25 EBITDA of INR 16.8 billion fell short of estimates due to lower merchant spreads and a one-time tariff impact from its hydro business.

Despite a 14% YoY increase in net generation, the adjusted PAT of INR 8.5 billion exceeded expectations by 20%, driven by higher other income and a reduced tax rate.

The management reaffirmed its full-year capital expenditure guidance of INR 150 billion, with locked-in capacity at 19.2 GW and only 3.5 GW awaiting PPAs.

80% of the project pipeline has achieved transmission and land-related visibility, ensuring timely completion of renewable energy projects.

Motilal Oswal maintains a BUY rating on JSW Energy, setting a target price of INR 900 per share, valuing the core business at 15 times the estimated EBITDA for December 2026.

The valuation also considers a 25% discount on the stake in JSW Steel, reflecting its strategic importance.