NHPC and SJVN are positioned favorably, experiencing a surge in capacity additions after a long haul, JM said while adding that CESC and Tata Power are focusing on renewable energy capacity expansions as a key driver for their growth.
Suzlon Energy remains optimistic about the ongoing momentum in capacity additions and is actively exploring diversification opportunities, both in terms of business and geographic expansion.
JM Financial, which recently hosted power companies including Suzlon Energy Ltd, Tata Power Ltd, JSW Energy Ltd, NHPC Ltd, SJVN Ltd and CESC Ltd at JM India Conference 2024, said the managements remained bullish on power demand and capacity expansions in both conventional sources (thermal and hydro) and renewable energy.
In a post event note, JM Financial said while the execution poses certain challenges, they are not significant enough to disrupt the overall growth cycle.
At present, NHPC and SJVN are positioned favorably, experiencing a surge in capacity additions after a long haul, it said while adding that CESC and Tata Power are focusing on renewable energy (RE) capacity expansions as a key driver for their growth.
"JSW Energy continues to identify opportunities in distressed assets across both thermal and RE, in addition to engaging in merchant trading. Suzlon Energy remains optimistic about the ongoing momentum in capacity additions and is actively exploring diversification opportunities, both in terms of business and geographic expansion.
Tata Power
JM Financial has a 'Buy' rating on Tata Power with a target price of Rs 501. The brokerage noted that the captive power requirement within the Tata Group is at least 10GW. The company is focusing more on RE-RTC projects with equity IRR returns of 17-18 per cent. The government is expected to soon make an announcement on nuclear power. The company is in talks to set up a small modular reactor, JM Financial said.
JSW Energy
JM Financial has a 'Buy' rating on JSW Energy with a target price of Rs 791. There is no competition between Battery and PSP technologies; both will coexist, the company's management told JM Financial. Out o the 3600 MW KSK Mahanadi, 1,800MW is operational, and for the remaining Balance of Plant is ready. The company is currently actively looking at inorganic opportunities in RE.
Suzlon Energy
JM Financial has a 'Buy' rating on Suzlon Energy with a target price of Rs 81. It said the industry installation is likely to be 4.6GW in FY25, 6-7GW in FY26 and 8-10GW in FY27. The current order book will be executed within FY26, it said adding that the land is available for 3GW out of 5.1GW order book. Hypothesis of Solar with storage to replace wind is not correct technically as well as financially, JM Financial said.
NHPC
JM Financial has a 'Buy' rating on NHPC with a target price of Rs 108. The brokerage said the company is not keen into scaling up in renewables. The RoE of current RE projects is 6-7 per cent. All four units of 800 MW Parbati-II and three units of 2,000 MW Subansiri Lower are likely to commission by March 2025, the company management suggested. The Subansiri project is expected to be fully commissioned by May 2026, JM Financial said.
SJVN
JM Financial has a 'Sell' rating on SJVN with a target price of Rs 71. It said Bikaner Solar park is the largest solar project of the company with capacity of 1,000MW and is expected to commission in CY25. The company is more inclined towards renewables than hydro, as hydro has higher gestation period and risks. Boiler light-up for Unit-1 of 1,320 MW Buxar thermal power was successful and the unit is expected to commission by January 2025.
CESC
JM Financial has a 'Buy' rating on CESC with a target price of Rs 206. It said the company's Calcutta business is growing around 7 per cent YoY. It expects 3.2GW/10GW renewable capacities by FY29/FY32. With integration of renewable projects with its distribution circles, the company will save cost of around Rs 2 per unit, JM Financial said.