Motilal Oswal Backs JSW Energy With Buy Call, Rs 657 Target

Motilal Oswal Initiates 'Buy' on JSW Energy, Sets INR 657 Target

Motilal Oswal Financial Services has issued a 'Buy' rating for JSW Energy (JSWE), projecting a substantial 34% upside with a price target of INR 657. This strategic assessment follows a recent plant visit to Vijaynagar on January 7-8, 2026, where the company showcased its advancements in green hydrogen and floating solar power generation.

Plant Visit Insights

The visit highlighted JSWE's 5,000 m3/hour green hydrogen plant, commissioned in November 2025 for captive use by the adjacent JSW Group steel plant. While green hydrogen economics remain a challenge, with costs around USD 3.5-4/Kg against the USD 2-2.5/Kg needed for mass commercialization, the company is actively investing in the technology. A 20 MW floating solar plant, commissioned in September 2025, was also showcased as a novel approach eliminating land acquisition needs and benefiting from natural cooling for enhanced generation.

Capacity Expansion and Strategy

JSW Energy has demonstrated robust operational capabilities, nearly doubling its operational installed capacity from 7.2 GW at the end of FY24 to 13.2 GW as of 2QFY26. This expansion is complemented by a significant project pipeline of 17.2 GW, with approximately 74% already secured under long-term Power Purchase Agreements (PPAs). The company also targets 40 GWh of energy storage capacity by FY30, with 29.4 GWh currently locked in. A strategic reduction in merchant power exposure to around 5% of its installed base is bolstering cash flow stability.

Financial Outlook

Driven by its strong, PPA-backed renewable energy pipeline, Motilal Oswal forecasts EBITDA and PAT to grow at a Compound Annual Growth Rate (CAGR) of 49% and 31%, respectively, between FY25 and FY28. This forward-looking perspective underpins the firm's bullish stance on JSW Energy's future performance and its ability to achieve its long-term generation capacity target of 30 GW by FY30.