scorecardresearchJSW Energy shares slump 6% following a decline in Q3 profit

JSW Energy shares slump 6% following a decline in Q3 profit

Updated: 23 Jan 2023, 11:22 AM IST
TL;DR.
JSW Energy reported a 45% drop in net profit for Q3, with lower short-term sales YoY and higher finance costs. The stock has declined 17.16% in the past year and analysts have a ‘Sell’ rating on it.
Over the last three years the stock is up by 271%, while in the last five-year period it returned nearly 175%.

Over the last three years the stock is up by 271%, while in the last five-year period it returned nearly 175%.

Shares of JSW Energy slipped 6.2 percent on Monday, January 23 after the company reported a 45 percent decline in its consolidated net profit to 180 crore for the third quarter that ended December 31, 2022, as against 323.93 crore during the previous quarter ended December 2021.

The company informed that the decrease is primarily due to lower short-term sales YoY, partly offset by the contribution from Vijayanagar Solar and higher other income in the quarter.

During Monday’s trade, the stock opened lower at Rs. 255 apiece as against the previous close of Rs. 262.35 per share and dipped further in the early trade to hit an intraday low of Rs. 245.85. It was trading at 247.50, down by 5.66 percent at 11:15 a.m. on the NSE.

The stock touched a 52-week-high of Rs. 369 on September 05, 2022, and a 52-week-low of Rs. 182.05 on June 20, 2022, indicating that at the current level, the stock is trading over 36 percent above its 52-week low and 33 percent below its 52-week high.

The stock has grown 3 percent in the last six months. However, in the past one year, it has declined by nearly 17.16 percent. However, over the last three years the stock is up by 271%, while in the last five-year period it returned nearly 175%.

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Stock price chart of JSW Energy

On Friday, the company stated that during the quarter that ended December 2022, its total revenue increased by 18 percent to 2,350 crore from 1,984 crore a year ago, due to higher realisation (as higher fuel costs are passed through in nature for LT PPAs (long term power purchase agreements).

The EBITDA for the quarter was 18 percent lower at 727 crore vis-a-vis 882 crore in the corresponding period of the previous year.

Finance costs during the quarter increased by 9 percent to 214 crore due to additional borrowings (for ongoing growth capex) and an increase in weighted average cost of debt to 8.29 percent with the rising rates cycle.

Liquidity continues to be strong with cash balances at 3,029 crore as of December 31, 2022. The company has one of the most substantial balance sheets among its peers with a large headroom to pursue value accretive growth opportunities, the company informed through and official filing.

The business said that its long-term sales for the quarter were 4,179 MUs (million units), unchanged year over year, as higher generation from SECI X and Vijayanagar Solar (225 MW) was offset by decreased hydro generation (due to weaker hydrology YoY). Due to weaker sales in the merchant sector, short-term sales during the quarter were 95 MUs as opposed to 323 MUs in Q3 FY22.

JSW Energy Limited is an India-based integrated power company engaged in the business of generation and sale of power. The company's segments include power trading, equipment manufacturing and mining. The company generates approximately 4,559 MW, out of which approximately 3158 MW is thermal power approximately 1391 MW is hydropower and approximately 10 MW solar power.

According to a MintGenie poll, an average of 10 analysts have a “Sell” rating on the stock.

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First Published: 23 Jan 2023, 11:22 AM IST