Top Stock Pick For 2025: JSW Energy Is A 'Buy' For Motilal Oswal; Execution, PPA Visibility Higher Than Peers

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.While the 2024 year-to-date witnessed a broad-based rally, with the five power utility stocks in our coverage up 7-52%, we believe that in 2025, the valuation premium commanded by Renewable Energy (RE) generation players will be a function of:the ability to sustain returns by up-trading into niche business models, e.g. Firm and Dispatchable Renewable Energy, and the ability to maintain high earnings/cash flow visibility, given the ongoing delays in PPA signings that have recently plagued the sector.  On both these parameters, we highlight JSW Energy Ltd. as our preferred pick in the power utility space. The company is set to raise its installed capacity to 20 GW (ex-KSK Mahanadi acquisition) by FY28-end (Q2 FY25-end: 7.7GW). JSW Energy's strong experience of operating wind assets (2.1GW operational versus 0.1/1.6GW for NTPC Green/Adani Green) is key to up-trading into FDRE bids, where tender announcements have been strong at ~9GW in 2024 YTD (2023: 11GW). With returns from plain vanilla solar/wind projects becoming commoditized, we believe FDRE tenders are critical for sustaining mid-to-high teen equity returns. Moreover, despite recent concerns over delays in PPA tie-ups, JSW Energy has secured Power Purchase Agreements for 66% (7.7GW) of its RE pipeline versus 34%/37% GW for NTPC Green/ Acme Solar, respectively.Our SOTP-based target of Rs 816 for JSW Energy values the renewable business at 15 times FY27 Ebitda, the thermal business at 10 times FY27 Ebitda, and the hydro business at three times FY27 book value. We also highlight Rs 60 in option value relating to the KSK Mahanadi acquisition and Rs 57 relating to O2 Power acquisition..Click on the attachment to read the full report:.IT Q3 Preview - Setting The Stage For A CY25 Revival; LTIMindtree, Coforge Remains Motilal Oswal's Top Picks.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Top Stock Pick For 2025: JSW Energy Is A 'Buy' For Motilal Oswal; Execution, PPA Visibility Higher Than Peers

Company's valuation premium seems well-deserved in light of recent IPOs, says Motilal Oswal.

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