JSW Energy shares jumped 2% after Jefferies reiterated a ‘Buy’ rating on the stock and raised its target price to ₹700, signaling a potential 35% upside from the current market price of ₹519.00.
The brokerage addressed investor concerns about weak power demand, declining merchant prices, and rising debt levels post-acquisitions. However, Jefferies stated that JSW Energy’s recent acquisitions, including O2 Power and KSK Mahanadi, were completed at valuations below 10x EV/EBITDA, making them value-accretive.
Jefferies maintains its valuation of JSW Energy at 15x EV/EBITDA for FY27E, which is at the lower end of its historical trading range of 15-20x. The brokerage noted that similar valuations were seen during JSW Energy’s past capacity expansion phases.
Despite broader sector concerns over power demand and pricing, Jefferies remains optimistic about the company’s long-term growth, citing its aggressive expansion strategy and strategic acquisitions as major drivers of future earnings growth.
