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Informist, Monday, May 11, 2026

 

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--JSW Energy: India's power demand rebounded in Q4
--CONTEXT: JSW Energy management's comments in post-earnings analyst call
--JSW Energy: India power demand FY27 till date remains healthy
--JSW Energy: Taken strategic steps to derisk thermal supply chain
--JSW Energy: Revenue loss due to power curtailment INR 160 mln in Q4
--JSW Energy: India's power demand recovery FY27 tailwind for co's earnings
--JSW Energy: Expect to add 3 GW renewable energy capacity in FY27
--JSW Energy: Of 2.6 GW installed capacity added FY26, 1.3 GW was acquisition
--JSW Energy: Cost of consol debt at around 8.36%
--JSW Energy: Going forward effective tax rate to be 23-24%
--JSW Energy: Continuing to sell power to merchant mkt at 20% premium in Q1
 

 

By Rajesh Gajra and Durgesh Nandan

 

MUMBAI – Domestic power demand growth, which was muted at 0.9% in FY26, has increased to 4.6% in the current financial year 2026-27 (Apr-Mar) "so far", the management of JSW Energy Ltd. said in a post-March quarter earnings conference call with investors and analysts Monday. The March quarter saw a fair power demand recovery, and the expected demand recovery in FY27 in the country will act as "tailwinds" for the company's earnings for the full year, a top official said.

 

Factors such as inducting heating for cooking, electric vehicles, and data centres, will lead to a rise in electricity demand in FY27 and beyond, according to JSW Energy's management. "The ongoing West Asia crisis has further reinforced the need of energy self-reliance for India," the official said. The country's coal reserves insulate it from the ongoing volatility in crude oil prices and supply, and it is an advantage the country is actively leveraging, he added.

 

To a question on merchant market sales in Apr-May, a top official said the company was continuing to sell at around 20% premium rates like it did in FY26. JSW Energy deals in merchant market through bilateral contracts, and "I can say whatever merchant tariffs are being discovered in the market, we will definitely maintain at least minimum 20% premium," he said.

 

In his opening remarks in the investor concall, the top official said the merchant market had "remained soft through most of FY2026, averaging approximately INR 3.86 per unit on (power) exchanges, reflecting muted demand." Notwithstanding this softness, JSW Energy's FY26 merchant sales realisations were at more than 20% premium commanded more than 20% premium to average power exchange prices. "We are already seeing tariffs form up in FY27 as summer cooling demand builds," he added.

 

JSW Energy is targeting capital expenditure of around INR 200 billion for FY27, and is "looking to add about 3 gigawatt capacity" during the year, the official said. The capacity addition in FY27 will be in a mix of solar, wind, and hybrid, projects, with 35-40% in wind, and rest in solar, he said. "Beyond FY27, the thermal energy capacity will also contribute to capacity additions," he said.

 

In FY26, the company increased its installed capacity by 2.6 GW to 13.45 GW, with the power generation increasing 58% on year, the management said. The capacity addition was "via a calibrated strategy of organic and inorganic growth" where 1.3 GW was in the form of acquired capacity and the rest was greenfield capacity "which we have commissioned," a top official said. All of the capacity addition in FY26 was in renewable energy, according to the earnings investor presentation.

 

To a question on the effect of grid-based power curtailment due to power evacuation constraints on the company's top line, a top official said "only a small portion" of it did not fetch the company the tariff as per the permanent recovery norm for the curtailed units. JSW's revenue loss for the March quarter due to power curtailment was around INR 160 million, he said.

 

"Today, we see that there are curtailments happening for especially the capacities which are open, untied merchant capacities in solar," he said. This results in a sunk cost for the company if not reimbursed under the permanent recovery norm, he said.

 

On supply chain for its thermal power segment, the management said the company has taken strategic steps to de-risk the chain through the procurement of turbine generators for its Salboni unit in West Bengal through its joint venture with the Toshiba group, Toshiba JSW Power Systems Pvt. Ltd.

 

On the cost of capital, the official said "consistent with our earlier guidance, our weighted average cost of debt declined by approximately 67 basis points year-on-year to 8.36%" as of the end of the March quarter. This calculation included the cost of working capital, he added. To a question on tax assets benefit the company saw in the March quarter, the management said these were one-offs, and going forward the effective tax rate for the company would be 23-24%.

 

JSW Energy reported a 9% on-year decline in its consolidated net profit for the March quarter at INR 3.72 billion, even as revenue from operations jumped 41% to INR 44.99 billion. On Monday, shares of the company closed 2.6% lower at INR 556.65 on the National Stock Exchange.  End

 

Edited by Avishek Dutta

 

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