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JSW Energy Shares Rise After Q1 Beat

The ramp-up in JSW Energy's renewables capacity is on track, brokerages said, even as most of them remained cautious on the stock.

<div class="paragraphs"><p>JSW Energy 's plant in Vijayanagar, Karnataka. (Photo: Company’s website)</p></div>
JSW Energy 's plant in Vijayanagar, Karnataka. (Photo: Company’s website)

Shares of JSW Energy Ltd. rose the most in nearly two weeks after the Sajjan Jindal-led power firm beat analysts' estimates in the first quarter. The stock, however, pared most of the gains at close.

JSW Energy Q1 FY23 (Consolidated, QOQ)

  • Net Profit at Rs 554 crore vs Rs 877 crore (Estimate: Rs 404 crore)

  • Revenue from operations at Rs 3,026 crore vs Rs 2,441 crore (Estimate: Rs 2,252.5 crore)

  • Ebitda at Rs 1,022 crore vs Rs 1,132 crore (Estimate: Rs 875 crore)

  • Ebitda margin at 33.8% against 46.3%

The ramp-up in renewable energy capacity is on track, brokerages said, even as most of them remained cautious on the stock.

Shares of JSW Energy rose more than 6% as of 12:30 p.m. on Friday. The stock closed with nearly 1% gains. The trading volume was nearly five times the 30-day average, when markets closed.

Of the 14 analysts tracking the company, two suggest a 'buy' and 12 recommend a 'sell', according to Bloomberg data. The average of the 12-month target price implies a downside of 22.2%.

Here's what brokerages have to say about JSW Energy's Q1 results.

Jefferies

  • Reiterates 'buy', raises target price to Rs 315 from Rs 310, an implied upside of 33.73%.

  • Renewable energy capacity ramp-up is on track.

  • Expects 13% of coal capacity (merchant-based) to benefit from tight power demand-supply environment in FY23E-26E.

  • Management will maintain return discipline ahead of tariff-based competitive bidding.

  • Raises FY23E-25E EPS by 1-5%.

Kotak Institutional Equities

  • Reiterates 'sell' with a target price of Rs 115, an implied return of -52.13%.

  • Higher quantum of short-term sales aided Ebitda.

  • Current market price factors all benefits of targeted capacity additions and earnings growth till FY2030E.

  • The company's renewable portfolio is on track with PPAs secured for all assets.