Stock to Buy: JSW group stock with upside potential of 45% by Morgan Stanley

Synopsis: One of the largest companies of the JSW group which has seen a 60 percent revenue growth in Q2FY26 are expected see its shares hit a target price of Rs 693 by the renowned financial service firm Morgan Stanley considering recent deal wins, capacity expansion and more.

One of India’s largest companies in the power generation sector which also happens to be part of one of the largest Indian conglomerate group JSW saw its stock in the spotlight soon after Morgan Stanley initiated a coverage on it with a 46 percent upside. With a market cap of Rs 82,355, JSW Energy Ltd currently trades around Rs 475, this stock has given a compounded return of 22 percent over the past 3 years.

Brokerage Rational

One of the leading brokerage houses Morgan Stanley has initiated a overweight coverage on JSW Energy with a buy price of Rs. 693, leading to an upside potential of upto 46 percent.

The broker has stated that JSW Energy has signed a Power Purchase Agreement (PPA) with West Bengal for a greenfield 1,600 MW thermal power plant at Salboni, with a tariff of 5.8/unit, higher than the earlier 5.45/unit, reflecting increased thermal equipment costs over the past 12 months. 

The plant will utilise domestic linkage coal allocated under the SHAKTI B(iv) policy. Morgan Stanley also stated that this PPA increases JSW Energy’s thermal capacity to 10.7 GW and total locked- in capacity to 32.1 GW. The project strengthens JSW Energy’s presence in India’s power sector, supports long-term capacity expansion, and aligns with domestic coal utilisation policies to optimise energy production and supply.

Apart from Morgan Stanley, another renowned broker Motilal Oswal also gave a Buy target of Rs 657 with the broker citing an upside potential of 38 percent in the stock. The rationale of Motilal Oswal included that the company is expanding into green hydrogen and floating solar, this showcases next-generation clean energy initiatives. 

Apart from that, the operational capacity of the firm has nearly doubled from 7.2 GW in FY24 to 13.2 GW in Q2 FY26, with a 17.2 GW pipeline (74 percent under long-term PPAs) targeting 30 GW by FY30. Out of these the company has locked in 9,058 MW in thermal, 6,511 MW in Solar, 7,103 MW is Hybrid, while the rest includes 1,781 MW of Hydro and 6,009 MW of Wind. Moreover in these numbers 12,540 MW is Under-construction and 13,211 MW is Installed.

Business & Financial Overview

JSW Energy Ltd, incorporated in 1994 and headquartered in Mumbai, Maharashtra, is the holding company of the JSW Group’s power business. It is primarily engaged in the generation of electricity from its power assets located in various places like- Karnataka, Maharashtra, Nandyal, and Salboni, with this the company has been supporting India’s energy infrastructure with thermal and renewable capacity.

In the latest quarter JSW energy saw a YoY revenue growth of 60 percent, going from Rs 3,238 Cr in Q2FY25 to Rs 5,177 Cr in Q2FY26, while the QoQ went up by barely 1 percent from Rs 5,143 Cr in Q1FY26. The YoY Net Profits fell by 6 percent, going from Rs 877 Cr in Q2FY25 to Rs 824 Cr in Q2FY26, while the QoQ fell by 1 percent from Rs 836 Cr in Q1FY26.

The company has its 3 year sales CAGR at 13 percent, but the TTM is high at 40 percent. Talking about 3 year profit CAGR the company has it at only 2 percent, while the TTM stands at 3 percent.

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