JSW Energy shares plunge 8% after Q4 profit drops 9% YoY; should you buy, sell or hold the stock?

JSW Energy Share Price: Shares of JSW Energy declined sharply on Tuesday even as the company reported healthy operational growth for the March quarter, with investors focusing more on pressure on profitability, higher debt and slower renewable energy execution.

The stock was trading at Rs 523.15 on the NSE at 1:27 pm IST, down Rs 33.50 or 6.02 per cent.

The fall came despite growth in both renewable and thermal power generation, as analysts flagged concerns around rising depreciation, higher interest costs and weak adjusted earnings.

Higher depreciation and interest costs hit earnings

JSW Energy’s depreciation expense rose 68 per cent year-on-year during the quarter, while interest costs jumped 138 per cent. Analysts attributed the increase largely to the company’s ongoing acquisitions and aggressive capital expenditure plans.

Over the past few quarters, the company has expanded rapidly through renewable projects and acquisitions, but the higher borrowing costs linked to this expansion are now beginning to impact profitability.

Adjusted numbers remain weak

While the company remained profitable on a reported basis, analysts pointed out that adjusted earnings painted a weaker picture.
After excluding deferred tax benefits and one-time gains, the company reported an adjusted loss for the quarter.

Profitability was also affected by payouts linked to acquired assets such as KSK Mahanadi. Management said it expects to acquire the remaining 26 per cent stake in the asset by FY27.

Renewable capacity addition disappoints

The pace of renewable energy commissioning also remained below expectations. In the second half of FY26, the company added lower renewable capacity than earlier guided, which disappointed investors tracking execution timelines.

Analysts believe slower commissioning could delay growth visibility and keep pressure on return ratios in the near term.

Debt levels continue to remain high

Street sentiment also remained cautious due to elevated debt levels. The company’s expansion strategy and acquisition-led growth have increased leverage, leading to higher finance costs and concerns around balance sheet pressure.

Brokerages retain cautious view

Brokerages maintained a mixed stance on the stock after the results. JPMorgan Chase maintained its ‘Underweight’ rating on JSW Energy, while raising its target price to Rs 505 from Rs 452 earlier.

CLSA retained its ‘Hold’ rating and increased its target price to Rs 558 from Rs 486.

The brokerage commentary indicates that operational growth remains healthy, but concerns around profitability and leverage continue to limit confidence.

Operational performance stays strong

Despite pressure on the stock, operational numbers for the quarter remained robust. Renewable energy generation rose 68 per cent year-on-year, while thermal generation increased 43 per cent.

During FY26, JSW Energy added 2.6 GW of renewable energy capacity, taking its total operational capacity to 13.45 GW.
The company also reiterated its target of reaching 30 GW operational capacity by FY30 as it continues to expand its renewable energy portfolio.