Maintaining their upward trajectory, Shares of SJVN spiked over 14% in early trade on Monday to register a new all-time high of ₹57.20 apiece. This came in response after the company, in an exchange filing on July 22, said that its wholly-owned subsidiary, SJVN Green Energy Limited, had received a letter of Intent (LOI) from Punjab State Power Corporation Limited (PSPCL) for the procurement of 1200 MW of solar power.
The Solar projects will be developed under the Build Own and Operate (BOO) model, with a tentative construction cost estimated at ₹7,000 crore, the company said.
In a separate exchange filing, the company also informed investors that it signed an MoU with REC Limited ("REC") for financing the projects of the Company and its subsidiaries and joint ventures to the extent of ₹50,000 crore.
"REC will provide financial assistance to set up New Power generating Stations based on conventional and renewable sources of energy. REC will also assist financially in setting up new technology projects like Battery Storage, E-Vehicles, Green hydrogen and ammonia, Hydrogen cells Storage, and Manufacturing units for Green Projects."
"The MoU covers the construction of evacuation and transmission projects and includes strengthening/improvement of existing transmission system," the company said in a regulatory filing.
Notably, SJVN's shares have been riding high on Dalal Street, buoyed by a series of significant order wins and strategic partnerships. From its March 2023 low of ₹30.40 apiece, the shares have zoomed to the current level of ₹56, resulting in a stellar rally of 84.20%.
On July 20, the company signed Power Purchase Agreements (PPA) for 300 MW of renewable energy projects.
The PPAs include a 200 MW Solar Power Project with Maharashtra State Electricity Distribution Company Limited (MSEDCL) in Mumbai and a 100 MW Wind Power Project with Solar Energy Corporation of India Limited (SECI) in Delhi.
The development cost for the 200 MW ground-mounted solar project in Maharashtra is estimated at ₹1,200 crore, while the 100 MW Wind Power Project is expected to cost around ₹750 crore.
Prior to this, SJVN Green Energy secured the full quoted capacity of the 200 MW Wind Power Project through competitive bidding conducted by SECI. The project, valued at ₹1,400 crore, is set to be developed on a Build Own and Operate (BOO) basis. Additionally, the company won a 100 MW project through a tariff-based bidding process in Gujarat, which is estimated to cost approximately ₹800 crore.
Meanwhile, global brokerage firm Goldman Sachs has recently initiated covering the stock, giving it a 'buy' recommendation with a target price of ₹55 per share. As of now, the stock is trading 2% higher than Goldman Sachs' target price.
Brighter outlook
SJVN is engaged in the construction and operation of hydropower plants and thermal power plants. It also participates in renewable energy projects such as wind power and solar power, along with exploring opportunities in new and emerging technologies like battery storage, electric vehicles, green hydrogen/ammonia, and hydrogen cell storage.
The company is a Mini Ratna, Category-I, and Schedule-A’ CPSE under administrative control of the Ministry of Power, Govt. of India, was incorporated on May 24, 1988, as a joint venture of the Government of India (GOI) and the Government of Himachal Pradesh (GOHP).
As of June 30, 2023, the Government of India owned a 59.92% stake in the company, while 26.85% was held by the Government of Himachal Pradesh and the rest (13.23%) by the Public.
The company is committed to achieve 25 GW of generation capacity by the end of the current decade, more than half of which is bound to come from renewable resources. With a total project portfolio of 54,327 MW, the Company is on a rapid progression to achieve its shared vision of 5,000 MW by 2023–2024, 25,000 MW by 2030, and 50,000 MW company by 2040.
This shared vision has been formulated in sync with the commitment of the Government of India of generating 50% of energy from non-fossil fuel-based energy resources by 2030.
05 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
