JSW Energy's pre-tax profit rises 41% as plant earnings outpace interest and depreciation

JSW Energy has spent two years buying and building power plants, and for most of the past year its sales grew while its profit did not. In the September 2026 quarter that changed. Profit before tax was ₹1,348 crore, 41% more than a year earlier, the first year-on-year rise in five quarters, after four straight falls. Profit before tax is the cleaner gauge here: in two of those weak quarters net profit still rose, because the tax line was negative.

The long gap comes from how the expansion was paid for. Borrowings reached ₹82,547 crore at the end of September, nearly two-thirds more than eighteen months earlier. A new plant adds sales from the day it runs, but it also adds depreciation, the accounting charge for wearing out the asset, and interest on the debt that bought it. In the quarter before last, those two costs rose by ₹364 crore on the year, while EBITDA (earnings before interest, tax, depreciation and amortisation, here measured without other income) rose by only ₹84 crore. Profit before tax fell as a result.

Last quarter the sums ran the other way. EBITDA rose ₹621 crore on the year. Higher depreciation and interest took just over half of that, calculated from the filed results, and other income added ₹103 crore. The margin did not widen; EBITDA came to 56.8% of sales, a little below a year earlier. The gain came from a bigger business whose carrying costs grew more slowly than its earnings.

Management named where the extra earnings came from. Utkal, a coal-fired plant that now sells under long-term contracts, more than tripled its plant EBITDA to ₹368 crore, the company said. Two new hydro plants, Kutehr and Tidong, added output. And power sold on the open market fetched ₹6.90 a unit, about a fifth above the average exchange price.

Those sources will not last equally. Utkal's contracts and the new hydro plants stay in place; the open-market premium has to be won again every one to three months, the term of those sales. Management said the current quarter is already sold at prices no lower than last quarter's, while talks for the one after have only begun. Part of the rise over the quarter before is recovery: the chief financial officer said Utkal had outages then. Against a year earlier the season did not help; management said the monsoon was weaker this year, and its hydro output still rose because of Kutehr and Tidong.

The other cost that decides the result is the price of money. The company's average cost of debt has come down to 8.28%. Asked what a rise in the Reserve Bank of India's policy rate would do, management said about a quarter of term debt is fixed and most of the floating part follows banks' own lending benchmarks rather than the policy rate directly. The chief financial officer's own sum for a further rise came out slightly higher before refinancing, but he said the company would look at a cost "not more than 8.50%". By Inve's arithmetic, a rise to that level across all borrowings would add about ₹182 crore a year to interest. That assumes refinancing holds the cost to that level, as the chief financial officer expects; his blended figure already allows for the fixed-rate debt.

The rest depends on building on schedule. Since April the company has commissioned 1.4 GW of its own renewable plants, more than in the whole of the previous financial year and nearly half of this year's guidance. The record argues for weighing the remainder carefully: on 15 May 2025 the company guided organic additions of 3 to 3.5 GW a year, and in the financial year that followed it added about 1.2 GW. The larger part of this year's target is due in the second half, and management said that work is on track. Last quarter showed the borrowed capacity earning more than it costs to carry; the second-half commissioning and the rate on the debt will decide whether that holds.