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Informist, Thursday, Jul. 31, 2025

By Aaryan Khanna and Pratiksha 

NEW DELHI – JSW Energy Ltd. is working to expand the operational energy output from its KSK Mahanadi thermal power plant to its full 3.6 gigawatts capacity, the company's management told analysts and investors in a conference call Thursday. This would double the current operational capacity of the plant. It has already begun work on commissioning the fourth of six units of 600 megawatts each, with the other two to follow. 

"We are in discussion for the commissioning of fourth unit, which is again of 600 MW...(in which) 40 to 45% work is already completed," the company's management said. "So this is apart from Salboni right now in the thermal space is what we are looking."

Since the Mahanadi project is in the coal-rich region of Chhattisgarh, the management sees no challenge in procuring raw materials for the expansion, or the need to import coal for the plant. As for monetisation of the new capacity, states' appetite for captive power plants has increased and the management expressed confidence in India's structural medium-to-long-term power demand. Currently, only 88 MW of the 1.8 GW operational capacity of the Mahanadi project is untied or free from power purchase agreements, the company said in its investor presentation. 

JSW Energy's consolidated net profit was up 42.4% on year at INR 7.4 billion during the June quarter, higher than the Street's average of INR 6.3 billion. The top line grew at its fastest pace since at least the December 2014 quarter, rising 78.6% on year to INR 51.4 billion. Reported earnings before interest, tax, depreciation and amortisation, or EBITDA, shot up 93% on year to INR 30.57 billion.

The Mahanadi project was a big contributor to the EBITDA in the reporting quarter, adding INR 8.67 billion. The management said its guidance of INR 24 billion of EBITDA per year from the Mahanadi project was a baseline, and that there is "no reason to assume" achieving or surpassing that target would be a challenge for 2025-26 (Apr-Mar). 

Post the quarter end, the National Company Law Tribunal bench has approved the debt settlement proposal of JSW Energy for KSK Water Infrastructures Pvt. Ltd., ending the latter's insolvency process. The management explained that the synergy from the company would be to maximise the use of the water facilities around the plant. 

For the overall portfolio, the management retained its guidance of adding another 3-4 GW of capacity in the current financial year, over and above the additional capacity from the purchase of O2 Power. It also retained its guidance for its capital expenditure of INR 150 billion-INR 180 billion in FY26, with around INR 24 billion spent in the June quarter.

On Apr. 9, JSW Energy completed the acquisition of O2 Power, with an operating capacity of 1.34 GW as on Mar. 31. The company said that as of now, O2 Power has an installed capacity of 1.8 GW, which is expected to scale up to 4.7 GW by June 2027 through a planned capital expenditure of INR 130 billion to INR 140 billion.

Speaking about new projects, the management said its green hydrogen project in Vijaynagar, Karnataka, was near completion. The project can generate 3,800 tonnes per annum of green hydrogen and its trial run was in an advanced stage, with the company "confident" that the plant would be commissioned in the September quarter. The project would have an internal rate of return in the "mid-to-high teens", similar to its other power projects, the management said.

Also in Vijaynagar, JSW Energy announced that its foray into floating solar projects was near completion. It was looking to commission its 20 MW floating solar project in the September quarter as well, the management said. 

Renewable energy contributed around 37% of the power producer's net power generation in the June quarter. Wind energy contributed over 2.1 billion units of the total 4.99 billion units produced through renewable energy. The firm was also investing heavily in building wind blades in southern and western India, the site of a majority of its wind projects. The blades will be assembled in India through a licensing agreement with Chinese manufacturer SANY, which has a subsidiary in India since 2008. The company had started committing capital in to the project, it said.

"The reasons are two – basically to de-risk our supply chain and ensure that timely supplies of the blades are there," the management said. "And second is that importing the blades contributes to a high logistics cost. So there will be more efficiency in terms of the cost in the project execution."

It also expects an initial capital outlay of INR 1.65 billion to INR 1.80 billion to establish a battery assembly plant in Pune with a rated capacity of 5 gigawatt-hour per annum dedicated to supporting battery energy storage systems. This was another project to help de-risk the company's supply chain, the management said. It would conduct a trial run in the plant during the September quarter. As part of its energy storage vertical, JSW Energy has also signed a battery energy storage agreement for 1.2 gigawatt-hour in the June quarter.

The company highlighted that most of its total installed capacity of 12.8 GW was generating returns through power purchase agreements, with only 974 MW "untied" to these contracts. Of this "untied" portion, only around 10% relied on imported coal, where there were risks of supply chain disruptions and volatility in global prices. The company said it does not have a preference in entering power purchase agreements, and decides what rate of return it will get whether in agreements or "untied". The decline in India's power demand in the June quarter due to monsoon, at around 1.5% on year, is likely to normalise in the coming quarters, the management said.  End

Edited by Tanima Banerjee

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