The thermal portfolio has rising contracted offtake, with long-term power purchase agreements (PPAs) accounting for 82 per cent of total power sales. Volumes were up 63 per cent Y-o-Y. But while renewable generation nearly doubled Y-o-Y, it dropped sequentially due to wind and hydro weakness. Merchant exposure will drop below 5 per cent from April 2026 due to the contracting of new PPAs, including 400 megawatt (Mw) tieup in Utkal.
Revenue grew 67 per cent Y-o-Y to ₹4,080 crore but dropped 21 per cent Q-o-Q. The reported loss was ₹260 crore, excluding deferred tax asset recognition and exceptional expenses due to Labour Code changes. JSW Energy recognised a total deferred tax asset of ₹750 crore during Q3FY26, with ₹560 crore in Utkal and ₹190 crore in KSK Mahanadi Power Company accounting for estimation of recoverability of carry-forward losses and unabsorbed depreciation. Adjusted net profit rose 189 per cent Y-o-Y to ₹490 crore, down 31 per cent Q-o-Q on high depreciation and higher finance charges due to capex and acquisitions. JSW’s finance costs hit ₹1,480 crore, up 163 per cent Y-o-Y and up 5 per cent Q-o-Q, due to acquisitions and capex.
In Q3FY26, JSW commissioned a green hydrogen plant at Vijayanagar with capacity of 3,800 tonnes per annum (tpa) of hydrogen and 30,000 tpa of oxygen. The Kutehr hydro project has also stabilised. The company has acquired a GE Boiler plant in Durgapur and Toshiba JSW turbines, with the deals closing in Q4FY26 and Q1FY27, respectively.
The company received shareholder approval for a ₹3,000 crore equity issue to the promoter group, which will help fund future capex and reduce leverage. Of the ₹3,000 crore, ₹500 crore will come via equity and ₹2,500 crore via warrants (to be converted within 18 months).
The net debt stood at ₹63,700 crore versus ₹61,900 crore at end-Q2FY26. Receivables at Q3FY26-end were ₹3,000 crore, about 73 debtor days, which is an improvement Y-o-Y from 96 days at Q3FY25. There’s ample liquidity with cash balances of over ₹7,100 crore.
Thermal generated 7.9 BU, up 55 per cent Y-o-Y at 69 per cent plant load factor (PLF), contributing 68 per cent to operating profit. Renewable energy (RE) generated 3.2 BU, with wind PLF at 16 per cent and hydro at 27 per cent. KSK Mahanadi contributed ₹730 crore operating profit at 66 per cent PLF.
Merchant exposure was at 8 per cent in Q3FY26, and will drop below 5 per cent by April 2026 with PPAs such as Utkal's 400 Mw 25-year tieup at ₹5.78/unit and 115 Mw short-term commitment to Assam. Salboni has a new 1.6 Gw PPA, taking the total contracted to 3.2 Gw at ₹3.65-4.06/unit with a fixed fuel passthrough. KSK has a tariff reduction of ₹1.25/unit on 1 Gw from FY27, which it hopes to offset by higher efficiencies.
JSW targets tripling capacity to 30 Gw by FY30 from 13.3 Gw, which could lead to an operating profit growth of 32 per cent between FY25 and FY30, with 40 GWh (gigawatt-hour) storage. The portfolio by then would be 73 per cent RE. The company has locked in a pipeline of 32.1 Gw with 13.3 Gw operational and 14 Gw under-construction, and committed PPA. The annual addition of 3-4 Gw of RE commissioning through FY31 is de-risked by state transmission utilities connectivity of around 70 per cent.
The Q3FY26 capacity addition was low at 125 Mw but JSW is planning another 1.4 Gw addition in Q4FY26E, which is lower than expected due to transmission bottlenecks. RE bidding moderated, with only 10.4 Gw bids in first nine months of 2025-26 (M9FY26). Standalone revenue declined 30 per cent Y-o-Y during the quarter. Earnings in FY27 will be pulled down a lot by capitalisation of new assets. Analysts are downgrading earnings per share to offset higher depreciation and interest costs. The stock has corrected on the weak results but it may correct further.
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