Multibagger JSW Energy Share price saw sharp rise of almost 8% during the intraday trades on Thursday . JSW Energy Share price however ended the day with gains of 7.03% on the NSE and is up 116% in a year and almost 750% in 5 years.
The rising capacities. increasing renewable portfolio and strong power demand in the country remain favorable, leading to gains for JSW Energy share price. The Q4 performance. also reflected the benefits The net generational 4QFY24 at 6,397 Million unit was up 26% YoY driven by the higher thermal generation and contribution from acquired as well ass greenfield renewable Energy (RE) capacities. Merchant generation stood at 1008 mu and 629 mu during 4QFY24 and 4QFY23 respectively.
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The earnings Before interest tax depreciation and amortisation (Ebitda) in the March quarter surged 47% yoy to ₹1,292 Crore resulting in 29% YoY increase in net profit to ₹351 Crore
Project pipeline to fuel growth
JSW Energy has won Renewable Energy bids with a cumulative capacity of 3.4 Giga Watt in the quarter adding to its generation Projects. Of these iIt won Solar bids worth 2.4 GW, which included 700 MW each from SJVN, NTPC Limited and South Eastern Coalfields Limited . It won 300 MW from Gujarat Urja Vikas Nigam
Wind projects worth 1.0 Giga Watt were won from South Eastern Coalfields Limited under Tranche XVI
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Among acquisitions, an execution of Business Transfer Agreement for 45 MW Vashpet Wind projects was completed , for which transaction has also completed in April-2024).
Analysts at JM Financial Institutional Securities said that JSW Energy added and secured greenfield Renewable Energy capacity of 681 Mega Watt and 3.4 Giga Watt (GW) during FY24 taking Renewable Energy locked-in capacity to 13.2 GW. JSW Energy is also securing the wind energy supply chain with the signing of a technology licensing agreement with SANY Renewable Energy, China. JM Financial analysts believe that JSW Energy is right on track to achieve its target of 10GW and 20GW Renewable Energy capacity by 2025 and 2030 respectively. JM Financial maintains BUY rating on the stock, with a SOTP-(sum of the Parts) based target price of ₹648.
Concerns being addressed-
Analysts at Jefferies India Pvt Ltd while said that JSW Energy 4Q results were broadly in line with expectations, however highlighted some Investor concerns . These pertain to staff paper of Central Electricity Regulatory Commission suggesting a cap on higher end of merchant prices, Reserve Bank of India draft on additional upfront project finance provisioning of 5%, a business side concern pertaining to Rs10,000 Crore enabling resolution on fund-raising by the company, and some delay in Unit 2 commissioning of Ind-Bharat plant.
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Jefferies analysts say that staff paper is not a draft regulation and only discusses exchange pricing. Further future bids should factor higher interest costs if RBI draft goes through however on business side concerns Jefferies said that management highlighted that Rs10,000 Crore fund-raising resolution is only an enabling one and such resolutions taken in the past haven’t led to fund-raising.
Jefferies analysts forecast 33% Earnings CAGR (compounded annual growth) during FY24-27. Their target price of Rs690 values JSW Energy at 16 time Enterprise Value to Ebitda based on September 2026 estimates, which are closer to the lower end of the 15-20 times range it traded at post 2010 listing when capacity was visibly rising nearly 2 times.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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Published: 10 May 2024, 03:59 PM IST
