Summary
JSW Energy Limited - Q3 FY 2026 Earnings Call Summary Friday, January 23, 2026 7:00 PM IST
Event Participants
Executives 3 Bikash Chowdhury (Head Investor Relations and ERM), Chandrasekaran Prabhakaran (Chief Financial Officer), Sharad Mahendra (Joint Managing Director and CEO)
Analysts 5 Anuj Upadhyay (Investec Capital Services), Apoorva Bahadur (IIFL Capital), Atul Tiwari (JPMorgan), Mohit Kumar (ICICI Securities), Nikhil (UTI Mutual Fund), Rajesh Majumdar (360 ONE Capital), Satyadeep Jain (Ambit Capital), Sumit Kishore (Axis Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Power Sales | 11.1 billion units | +65% YoY; Outperformed industry de-growth of 0.1% despite long monsoon. |
| Revenue | ₹4,255 crores | +61% YoY; Driven by robust capacity additions and generation growth. |
| EBITDA | ₹2,202 crores | +98% YoY; Significant margin expansion due to higher operational capacity. |
| Profit After Tax (PAT) | ₹420 crores | +150% YoY; Aided by ₹746 crore Deferred Tax Asset recognition. |
| Cash Profit | ₹570 crores | +12% YoY; Reflects resilient cash flows despite higher interest/depreciation. |
| Net Debt | ₹63,771 crores | +2.9% QoQ; Pro forma leverage at 4.9x; expected to decline post-equity infusion. |
| Cost of Debt | 8.68% | -11 bps QoQ; Management expects continued declining trend via interest resets. |
| Total Receivables | ₹3,000 crores | 73 days vs 96 days YoY; Significant improvement in working capital cycle. |
| Installed Capacity | 13.3 GW | +64% YoY; Added 5.2 GW in last 12 months (3.1 GW RE, 2.1 GW Thermal). |
Geographic & Segment Commentary
- Thermal Generation: Net generation increased 55% YoY, driven by contributions from the KSK acquisition and Utkal plant capacity. The segment is de-risking via long-term PPAs, including a new 400 MW 25-year contract for Utkal with Karnataka DISCOMs starting April 2026 at a tariff of ₹5.78/unit.
- Renewables (Wind/Solar): Net generation surged 149% YoY, bolstered by organic additions and the O2 Power acquisition. While Q3 PLFs were seasonally lower, management noted that new wind projects are performing at or above national averages.
- Hydro: Generation grew 27% YoY, significantly outperforming the national average growth of 13%. Results were supported by improved hydrology and the stabilization of the Kutehr plant (130 MUs generated in Q3).
Company-Specific & Strategic Commentary
- Salboni Thermal Project: Secured a second 1,600 MW PPA with West Bengal, bringing total site capacity to 3,200 MW. Sourcing critical BTG equipment (boiler-turbine-generator) through associate Toshiba JSW and acquired GE Durgapur units to mitigate industry-wide supply constraints.
- Energy Storage & Green Hydrogen: Commissioned India’s largest green hydrogen plant (3,800 TPA) at Vijayanagar. BESS (Battery Energy Storage) containerization plant is nearing trial production in Feb-March 2026, using imported cells.
- Capital Structure: Completed ₹3,000 crore preferential allotment to promoters (₹500 crore equity, ₹2,500 crore warrants). Shareholders approved an additional ₹10,000 crore enabling resolution for potential QIP.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Generation Capacity | 20 GW (FY27); 30 GW (FY30) | Currently 27.5 GW locked-in/under construction; high certainty due to secured connectivity. |
| Storage Capacity | 40 GWh by 2030 | Currently 29.6 GWh locked-in; focusing on hydro-pumped storage and BESS. |
| Open Capacity | < 5% by April 2026 | Reducing from current 8% following the commencement of the Utkal-Karnataka PPA. |
| RE Capacity Addition | 1.5 GW in H2 FY26 | 125 MW commissioned in Q3; remaining capacity on track for Q4. |
Risks & Constraints
| Risk | Context |
|---|---|
| Grid Connectivity | Industry-wide bottleneck for RE; JSW claims insulation for 2 years as majority projects are STU-connected or part of O2 acquisition. |
| Merchant Market Volatility | Exchange prices declined YoY in Q3; however, JSW realizations remain at a 20% premium due to strategic short-term contracts. |
| Policy & Regulatory | DSM (Deviation Settlement Mechanism) tightening for wind/solar; industry is lobbying for relaxations or pooling options to mitigate financial hits. |
Q&A Highlights
Salboni Project Economics
- Question: What are the PPA details and capex for the Salboni mega project? (Sumit Kishore)
- Answer: Phase 1 (1,600 MW) fixed tariff is ₹3.65/unit; Phase 2 (1,600 MW) is ₹4.06/unit. Fuel is a pass-through. Estimated investment for Phase 1 is ~₹16,000 crores. Commissioning timeline is 48-54 months from notice to proceed (Sharad Mahendra).
KSW Mahanadi Tariff Impact
- Question: How will the tariff reduction for KSK impact EBITDA? (Rajesh Majumdar)
- Answer: A tariff reduction of ~₹1.25/unit for one DISCOM (UP) starts in FY27. Impact will be minimized by operational efficiencies and selling power during reserve shutdowns (Sharad Mahendra).
Supply Chain Integration
- Question: Will you manufacture your own boilers for Salboni? (Mohit Kumar)
- Answer: The GE Durgapur plant acquisition should close by June/July 2026. This facility will manufacture boilers for captive requirements, ensuring execution certainty (Sharad Mahendra).
Profitability and ROE
- Question: Why is PBT under pressure despite high growth? (Atul Tiwari)
- Answer: Heavy front-ended depreciation and interest costs from new assets impact short-term PBT. Returns improve as interest resets happen and seasonality (Q3 low RE/Hydro) passes (C. Prabhakaran, Bikash Chowdhury).
Key Takeaway
JSW Energy delivered a robust Q3 FY26 with a 65% YoY surge in power sales and a near-doubling of EBITDA to ₹2,202 crores, significantly outperforming a flat national power market. The company added 5.2 GW of capacity over the past year, reaching an installed base of 13.3 GW, with 82% of sales now tied to long-term PPAs. Strategically, JSW is securing its supply chain by acquiring GE’s boiler unit and partnering with Toshiba JSW for turbines, effectively mitigating industry-wide equipment shortages for its 3,200 MW Salboni project. While reporting a PAT of ₹420 crores (aided by deferred tax assets), the company is navigating a phase of high interest and depreciation costs inherent to its aggressive capex cycle. Management remains confident in reaching 30 GW generation and 40 GWh storage capacity by 2030, supported by a ₹3,000 crore promoter capital infusion and a de-risked portfolio with minimal merchant exposure.
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