Shares of JSW Energy fell nearly 7% in trade on Tuesday after the company reported a decline in quarterly profit despite strong growth in revenue and EBITDA, triggering a series of brokerage downgrades.
The stock declined as much as 6.8% to an intraday low of ₹512 on the NSE after the results announcement.
JSW Energy reported a consolidated net profit of ₹372 crore for the March quarter, down 8.8% year-on-year from ₹408 crore. Revenue from operations, however, surged 41% to ₹4,498.6 crore compared to ₹3,189.4 crore in the corresponding quarter last year.
EBITDA jumped 86.8% year-on-year to ₹2,249.8 crore from ₹1,204.6 crore, while EBITDA margin expanded sharply to 50% from 37.8% a year ago.
For the full financial year FY26, the company reported revenue of ₹18,901 crore, marking a 61% rise year-on-year. However, profit growth remained muted, reflecting pressure from higher finance costs amid aggressive capacity expansion.
Finance costs for the year more than doubled to ₹5,816 crore, highlighting the impact of debt-funded expansion projects on the company’s earnings profile.
Brokerages turned cautious following the earnings announcement and concerns over valuations and leverage.
Axis Capital downgraded the stock to ‘Reduce’ from ‘Buy’ and cut its target price to ₹544 from ₹560, stating that much of the company’s growth story appears to be priced in after the recent rally.
JM Financial also downgraded the stock to ‘Add’ from ‘Buy’ with a target price of ₹627, noting that one-off gains supported the quarterly performance.
Investec downgraded the stock to ‘Hold’ from ‘Buy’ and reduced its target price to ₹599 from ₹611, citing rising fixed charges linked to ongoing capex.
Meanwhile, CLSA flagged concerns around losses linked to acquisitions, weak merchant power market conditions, elevated valuations and the possibility of an equity raise weighing on the balance sheet. The brokerage also described JSW Energy as among the most leveraged players in the sector.
Analysts noted that while operational performance remained strong, future earnings growth will depend on merchant power tariffs, execution of expansion projects and the company’s ability to manage leverage effectively.