JSW Energy Limited

Integrated Annual Report 2020

Net Debt to EBITDA Ratio

Net Debt to Equity Ratio

We have inculcated a conscious approach to grow our business through the lens of commercial, social & environmental sustainability.

Our Balance Sheet strength is the result of prudent capital allocation, strong free cash flow generation, proactive deleveraging and sound working capital management. This has enabled us to steer through market adversities relatively unscathed.

Over the last few years, we have successfully tied-up a significant part of our generation capacity under long term PPAs with various counter-parties, thereby ensuring diversified, stable and predictable revenue streams to further de-risk our business. Moreover, with prudent hedging strategies and efficient working capital management, we have ensured healthy free cash-flows and insulated ourselves from the external risks of currency and fuel price fluctuations.

During the year, we reduced our Net Debt to ₹8,945 crore, a reduction of 11% YoY. With this, our Net Debt to Equity ratio has reduced to 0.77x and Net Debt to EBITDA to 2.76x. This gives us ample Balance Sheet headroom and ability to raise capital at favourable terms and conditions and strategically pursue value-accretive growth opportunities.

Resilience is a quality built over time, and we have nurtured our business model in a way that allows us to remain stable despite multiple sectoral headwinds.

With a clear roadmap to grow sustainably in the energy sector, we are expanding our portfolio to reach 10GW over the medium term with incremental capacity predominantly coming from renewable sources. Our financial strength will allow us to tap into these opportunities to effect this transition seamlessly and continue being an efficient provider of continuous high quality power to our customers.

We continue to stay focused as we move forward and navigate through the challenging sector dynamics with resilience. Given our Balance Sheet strength and operating expertise, we are confident of generating long-term value for all our stakeholders in a sustainable manner.