3 ‘Buy’ recommendations by Jefferies, with 15% to 31% upside potential

Jefferies also raised target prices on JSW Energy and Power Grid, while retaining a positive view on Adani Power. Among the three, JSW Energy offers the highest potential upside at 31%, according to the brokerage’s estimates.

Jefferies on JSW Energy: ‘Buy’

Jefferies maintained its ‘Buy’ rating on JSW Energy and raised the target price to Rs 675 from Rs 660. The brokerage sees an upside potential of 31%.

Jefferies said the company’s decision to partly monetise its stake in JSW Steel for Rs3,200 crore would help reduce leverage concerns. The brokerage added that the transaction also gives the company room to pursue future expansion without stretching the balance sheet.

According to Jefferies, JSW Energy Ltd. has already commissioned 250 megawatt of capacity during April and May 2026. That accounts for nearly 11% of its FY27 estimate. The brokerage revised its FY27 to FY30 profit estimates upward by 3% to 6% after factoring in lower interest costs arising from the stake sale. It now expects net debt to EBITDA to improve to 5.7x in FY27 from the earlier estimate of 6x. The ratio could further decline to 5.2x by FY30.

Jefferies also noted that the company still holds 4.5 crore shares in JSW Steel. The stake is valued at around Rs 4,800 crore based on the FY25 annual report. The brokerage believes this provides another funding cushion as JSW Energy continues to add capacity aggressively. It expects installed capacity to rise to 24.7 gigawatt by FY30 from 13.5 gigawatt in FY26. Renewable energy additions are likely to drive most of the growth.

The brokerage said earnings visibility has improved because most of the upcoming capacity remains tied to long-term power purchase agreements. Jefferies estimates merchant capacity contribution will fall to just 2% by FY30 from 9% in FY25. That could reduce earnings volatility materially. The brokerage also expects EBITDA to rise at a compound annual growth rate of 17% between FY26 and FY30.

Jefferies referred to the company’s second power purchase agreement signed with the West Bengal discom in January 2026 for 1.6 gigawatt of additional thermal capacity at Salboni. Management has reiterated confidence in achieving a 30-gigawatt capacity by 2030. That remains higher than Jefferies’ own estimate of 24.7 gigawatts.

“Upcoming capacity is largely PPA tied-up and helps in predictability of EBITDA growth in FY26-30E,” Jefferies said in its report.

The brokerage added that execution progress would remain the biggest trigger for the stock after the company missed its FY26 capacity addition guidance because of evacuation issues. Jefferies believes sustained commissioning momentum could help recover confidence around execution capability.

Jefferies on Adani Power: ‘Buy’

Jefferies retained its ‘Buy’ rating on Adani Power with a target price of Rs 255. The brokerage sees an upside potential of 15%.

Jefferies said Adani Power remains India’s only sizeable private sector pure-play thermal power generator. The brokerage expects the company to more than double its earnings before interest, tax, depreciation and amortisation by FY30.

The brokerage projected EBITDA growth at a compound annual rate of 23% between FY26 and FY30. Capacity could expand to 30.7 gigawatt by FY30 from 18.2 gigawatt in FY26. Jefferies said the company has already secured land and equipment orders for upcoming projects. Larsen and Toubro and Bharat Heavy Electricals are among the key suppliers. The brokerage expects 6.9 gigawatt of fresh capacity to become operational by FY29.

Jefferies also expects free cash flow generation to improve sharply over the next few years. The brokerage estimated free cash flow would turn positive by FY30 and reach Rs15,500 crore. That would amount to nearly 35% of EBITDA. Operational cash flow is projected to rise at a 20% compound annual growth rate during FY26 to FY30.

The report highlighted that risk perception around the business has eased because of a rising share of long-term power purchase agreements. Around 95% of the company’s current operating capacity is tied to PPAs. That compares with more than 80% at the end of FY25. Jefferies said 13.3 gigawatt out of the upcoming 23.7 gigawatt capacity addition is already secured under PPAs. That reduces dependence on merchant tariffs.

Jefferies also referred to several recent agreements signed by the company. It noted that Adani Power signed a 1.6 gigawatt agreement with Maharashtra State Electricity Board at Rs5.4 per unit in September 2024. Between August 2025 and March 2026, the company locked in another 8 gigawatt capacity with Bihar, Madhya Pradesh, Assam, Uttarakhand and Tamil Nadu distribution utilities. Tariffs ranged between Rs 5.80 and Rs 6.30 per unit.

The brokerage expects leverage to remain manageable despite aggressive expansion plans. Net debt to EBITDA is projected to peak at 3.4x in FY27 before easing to 2x by FY30. Return on equity is estimated to stay above 18%.

“Risk profile is diminishing with lower merchant share as capacity is being locked in with profitable PPAs,” Jefferies said.

The brokerage added that Adani Power’s growth profile remains stronger than NTPC over the next four years. Jefferies expects Adani Power’s EBITDA to rise 2.3 times between FY26 and FY30. NTPC’s EBITDA could rise 1.5 times during the same period.

Jefferies on Power Grid Corporation of India: ‘Buy’

Jefferies maintained its ‘Buy’ call on Power Grid Corporation of India and raised the target price to Rs 340 from Rs 325. The brokerage sees an upside potential of 15%.

Jefferies said a sharp rise in capitalisation and stronger execution visibility supported the upgrade in earnings estimates. According to the brokerage, Power Grid’s FY26 capitalisation rose more than three times year-on-year to Rs 28,200 crore. That exceeded the company’s upgraded guidance of Rs 25,000 crore.

. Quarterly capex climbed 53% to Rs 13,200 crore during the same period.

The brokerage raised its FY27 and FY28 earnings estimates by 3% after the company reiterated its capex and capitalisation guidance. Jefferies said management remained confident of achieving capex of Rs 37,000 crore in FY27 and between Rs 40,000 crore and Rs 45,000 crore in FY28. Jefferies noted that execution had slowed during the first half of FY26 because of land acquisition delays across Rajasthan, Delhi, Haryana and Gujarat. Manpower constraints linked to elections also affected project activity. However, execution recovered sharply in the second half of the year.The brokerage also pointed to a strong bid pipeline worth Rs 1.1 lakh crore. Jefferies said Power Grid currently holds a 52% market share in competitively bid transmission projects. Out of the total pipeline, Rs87,800 crore comes from interstate projects, while Rs17,600 crore comes from intrastate opportunities.

Jefferies expects transmission opportunities to remain strong over the long term because of rising investments in power generation and grid infrastructure. The brokerage estimated the broader transmission opportunity at more than Rs 15 lakh crore. That includes projects under the Central Electricity Authority’s FY36 transmission plan and high-voltage direct current projects linked to the Brahmaputra basin.

“Execution uptick gives confidence on PGCIL meeting its FY27E-28E capitalisation targets,” Jefferies said in the report.

The brokerage added that the stock’s valuation historically moved in line with capex trends. Jefferies expects further rerating if execution sustains over the medium term. The brokerage values the company at 2.8x price-to-book on FY28 estimates.

Conclusion

Jefferies’ latest utility sector calls show that the brokerage continues to favour companies with visible capacity addition pipelines, long-term power purchase agreements and improving execution trends. Among the three stocks, JSW Energy carries the highest upside potential at 31%. Adani Power and Power Grid each offer an estimated upside of 15% based on Jefferies’ revised targets.

Disclaimer: This article summarizes individual equity research reports and provides specific investment recommendations, ‘Buy’ ratings, and explicit price targets for JSW Energy, Adani Power, and Power Grid Corporation of India. The market analysis and company valuations presented are strictly the views of the tracking brokerage firm, Jefferies, and should not be construed as investment advice or a solicitation to trade. Readers are strongly advised to conduct their own independent research and consult a SEBI-registered investment advisor before making any financial decisions or market commitments based on these projections. This disclaimer has been generated using AI to support user well-being and responsible content consumption.