
Shares of JSW Energy plunged more than 7 per cent during the early trading session on Monday after the company reported a disappointing performance in the June 2023 quarter as its net profit almost halved and revenue also took a hit in the April-June 2023 period.
The consolidated net profit of JSW Energy for the quarter ended June 30, 2023 plunged more than 48 per cent on a year-on-year (YoY) basis to Rs 290 crore. JSW Energy had posted a profit of Rs 554.78 crore in the corresponding quarter last year, the company said in the filing. JSW Energy's revenue from operations dropped 3.3 per cent on year to Rs 2,927.85 crore from Rs 3,115.33 crore a year earlier, it said. "The revenue dropped on the back of incremental revenue from Mytrah and also because renewable energy capacity additions were offset by lower realization in thermal on account of decline in coal prices," the company added further. However, the company in a statement said after adjusting for one-offs for the first quarter of the last financial year (FY23) the decline in the net profit stood at 34 per cent in Q1FY24. It stated that the net profit in Q1 FY23 came to Rs 440 crore after adjustments for one-offs, even as the absolute number was Rs 554.78 crore. EBITDA of JSW Energy increased 18 per cent to Rs 1,307 crore from Rs 1,111 crore in the corresponding period in the previous financial year. The EBITDA margin was 43 per cent compared with 36 per cent a year earlier. The company increased its operating capacity to 6,564 MW in FY23 from 4,559 MW in FY22, adding 2 GW during the year. Following the announcement, shares of JSW Energy tumbled more than 7 per cent to Rs 282.05 on Monday, before making a partial recovery. The scrip had settled at Rs 304.55 on Friday. The total market capitalization stood little more than Rs 49,000 crore. Brokerage firms continue to remain divided on the stock after a muted performance by the JSW Energy. A few brokerages suggest to buy the stock citing increasing demands and FY24 estimates. On the contrary, a few suggest to sell the stock, citing Mytrah's hit on the net income of the company. JSW’s RoE remained subdued due to assets of 3.3 MW being under the commissioning stage. JSW is generating a cash flow of Rs 2,500 croroe 18 per cent CRoNW. With leverage, JSW aims at Rs 75,000 croroe in capex till FY30, said Antique Stock Broking. The path ahead for strategy 2.0 is clear: backward integration to lower input costs, locked-in sites for lower capex/ MW, and the first-mover advantage in energy storage. From the existing portfolio of 10 GW of assets, it added with a buy rating and a target price of Rs 349 for the stock. On the contrary, Kotak Institutional Equities maintains its 'sell' tag on the stock but has increased its fair value to Rs 195 from Rs 160 earlier as it rolled forward to FY2025 estimates and the higher value assigned to the renewable business. The brokerage sees another 36 per cent fall in the stock from its previous close. "JSW Energy is targeting 9.8 GW of capacity by FY2025E, which it is on course to achieve even as it has ambitious targets in pump storage hydro and battery storage (40 GW) as well as capacities in solar module (1GW) and green hydrogen (3,800 tpa)." Our FV estimate gives credit for 2.5 GW of renewable capacities, it added. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
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