We introduce FY23 estimates revising JSWEL’s target price upwards to Rs 66 (from Rs 60) but downgrade to Add due to the recent stock run-up.JSW Energy’s (JSWEL’s) subsidiary JSW Solar has received Letter of Awards (LoA) from SECI to set up blended wind capacity totalling 810MW (max solar energy blending allowed is 20%). This is a positive development for the company, which has a vision to reach 10GW capacity in the next 4-5 years, especially after the termination of GMR Kamalanga acquisition and prolonged delay of Ind-Barath Utkal’s (IBU) acquisition.
We now await the signing of PSA by SECI with a discom, after which commissioning will take 18-24 months. Hence, FY24 is likely to be the first full year of operations. Total estimated cost of the project is Rs 47-48 bn with D/E financing of 75:25. We believe JSWEL will have sufficient cash flows to fund the equity requirement…
