JM Financial in its latest earnings preview note expects many power companies to report flat or negative growth in revenue for the September quarter, driven by moderate power demand and stable fuel prices. The brokerage said any commentary on capacity addition in renewable energy and thermal), coal prices and power production will be keenly watched. It noted that power demand is expected to gain momentum during festive season as CERC estimated 230 GW of peak power demand in October. There is also projections of a harsh winter, with IMD projecting the likelihood of a severe winter due to La Niña, it said.
"Overall, we remain positive on the utilities space with increasing power demand and more policy focus on capacity addition," it said.
Suzlon Energy Ltd Among power sector companies, Suzlon Energy’s net revenue is seen increasing at least 18 per cent YoY on account of higher dispatches. Its profit is seen doubling to Rs 206 crore from Rs 102.30 crore in the year-ago quarter. The year-ago quarter had one-off loss on account of sale of subsidiary.
Bharat Heavy Electricals Ltd BHEL’s sales are seen rising 19 per cent YoY, driven by robust order book in power segments. Net loss for the PSU is seen narrowing to Rs 85 crore from Rs 211.40 crore in the June quarter and Rs 238.10 crore in the year-ago quarter. Ebitda for BHEL is seen improving due to operating leverage and better orders’ mix.
JSW Energy Ltd JSW Energy’s revenue may rise 12 per cent YoY due to higher thermal generation in Q2FY25 amid contribution from Ind-Barath Plant, the brokerage said. Net profit for JSW Energy may drop 28 per cent YoY to Rs 618 crore, as cost of fuel is seen coming to normal levels from lower base in Q2FY24.
NTPC Ltd JM Financial sees NTPC reporting net sales of Rs 44,000 crore in Q2FY25, down 2 per cent YoY due to moderating demand. Ebitda for NTPC is estimated at Rs 12,700 crore and PAT is projected to rise 4 per cent YoY to Rs 4,892 crore due stable cost of coal.
Power Grid, CESC Ltd "We expect Power Grid to report a flat quarter with net sales at Rs 11,200 crore, and Ebitda margin of 87 per cent. CESC is expected to report a 2 per cent YoY decline in revenue due to lower generation in the quarter because of high rainfall," JM Financial said. Power Grid's profit is seen rising 2 per cent YoY to Rs 3,864 crore, while CESC's bottom line is seen declining 2 per cent YoY to Rs 355 crore.
NHPC Ltd The domestic brokerage sees NHPC Q2 sales at Rs 3,044 crore, up 4 per cent YoY with Ebitda margin of 60 per cent. profit is seen at Rs 1,044 crore, down 32 per cent YoY due tax credit of Rs 500 crore in the base quarter.
SJVN Ltd SJVN sales are expected to increase 15 per cent YoY due to significantly higher hydro power generation, while Tata Power’s net sales are seen flattish with 8 per cent decline in Ebitda margin due to decline in earnings from Indonesian coal mines.
SJVN's profit may rise 9 per cent YoY to Rs 479 crore, JM Financial said. It sees Tata Power's profit falling 11 per cent YoY to Rs 905 crore.
Torrent Power Ltd Torrent Power may report a flattish quarter with revenue of Rs 6,821 crore, down 2 per cent YoY due to lower generation in gas-fired plants. Profit is seen falling 3 per cent YoY to Rs 539 crore.
Share price targets JM Financial has a 'Buy' rating on NTPC with a target price of Rs 451. It values Power Grid at Rs 381, Tata Power at Rs 491 and JSW Energy at Rs 793. The domestic brokerage has a target price of Rs 111 for NHPC, Rs 71 for Suzlon Energy, Rs 361 for BHEL, Rs 1,791 for Torrent Power and Rs 201 for CESC. JM Financial has 'Sell' recommendation on SJVN with a target price of 71. The brokerage will review price targets post Q2 results.