JSWENERGY - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.9

📊 Financials & Profitability

Revenue Growth: Strong long-term trajectory — revenue rose from ₹6,922 Cr in 2021 to ₹11,745 Cr in 2025

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Profit Trends: Net profit grew to ₹1,960 Cr in FY25, but recent quarterly PAT dropped from ₹464 Cr to ₹162 Cr — a 36.2% decline, indicating short-term volatility

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Return Metrics

ROE: 6.24% and ROCE: 5.82% — relatively low, suggesting capital is not being deployed at high efficiency.

EPS: ₹6.46 — modest for a ₹538 stock.

Debt Profile: Debt-to-equity at 0.44 — conservative and healthy for a capital-intensive sector.

Dividend Yield: 0.37% — low, but consistent ₹2/share dividend over five years shows stability

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💸 Valuation Indicators

Metric Value Insight

P/E Ratio 83.2 Extremely high vs. industry PE of 31.2 — richly valued.

P/B Ratio ~4.23 Expensive relative to book value ₹127.

PEG Ratio 3.04 Suggests overvaluation relative to earnings growth.

🔍 Conclusion: Valuation is stretched. Market is pricing in future capacity expansion and clean energy potential.

⚡ Business Model & Competitive Edge

Core Operations: JSW Energy is a diversified power producer with a growing renewable portfolio.

Expansion Strategy

Recently commissioned 317 MW of renewable capacity

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Acquired 150 MW Tidong hydro plant, boosting hydro portfolio to 1.8 GW — now India’s largest private hydro player

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GE Power demerger adds boiler manufacturing capabilities

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Portfolio Strength: Total capacity now at 30.5 GW, with 13.1 GW operational

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Growth Outlook: Brokerages like Morgan Stanley and Jefferies project 22–30% upside, citing aggressive capacity additions and long-term EBITDA growth

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📉 Technicals & Entry Zone

RSI: 60.3 — slightly bullish but not overheated.

MACD: 3.58 — positive momentum.

DMA Levels: Price hovering near 50-DMA and 200-DMA — consolidation zone.

📌 Suggested Entry Zone: ₹500–₹520 — near support levels, offering better risk-reward.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong renewable pipeline and strategic acquisitions support long-term growth.

Buy on Dips: Prefer entry below ₹520, especially if broader market corrects.

Monitor: Execution of hydro and renewable projects, margin recovery, and quarterly earnings volatility.

Would you like a forecast model for FY30 or a comparison with Tata Power and Adani Green next?

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Moneycontrol

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www.businessupturn.com

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www.cnbctv18.com

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