Multibagger JSW Energy share price rises 7%. Should you Buy, Sell or Hold the stock?

The rising capacities. expanding renewable portfolio and beardown powerfulness request successful the state stay favorable , starring to gains for JSW Energy stock price. The Q4 performance. besides reflected the same.  The nett generational 4QFY24 astatine 6,397 Million portion was up 26% YoY driven by the higher thermal procreation and publication from acquired arsenic good ass greenfield renewable Energy (RE) capacities.  Merchant procreation stood astatine 1008 mu and 629 mu during 4QFY24 and 4QFY23 respectively.

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The net Before involvement taxation depreciation and amortisation (Ebitda) successful the March 4th surged 47% yoy  to ₹1,292 Crore resulting successful 29% YoY summation successful  net nett to ₹351 Crore

Project pipeline to substance growth

JSW Energy has won Renewable Energy bids with a cumulative capableness of 3.4 Giga Watt successful the 4th adding to its procreation Projects. Of these iIt won Solar bids worthy  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 worthy 1.0 Giga Watt were won from South Eastern Coalfields Limited nether 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 besides completed successful April-2024). 

Analysts astatine JM Financial Institutional Securities said that JSW Energy added and secured greenfield Renewable Energy capableness of 681 Mega Watt and 3.4 Giga Watt (GW) during FY24 taking Renewable Energy locked-in capableness to 13.2 GW. JSW Energy  is besides securing the upwind vigor proviso concatenation with the signing of a exertion licensing statement with SANY Renewable Energy, China. JM Financial analysts judge  that JSW Energy is close connected way to execute its people of 10GW and 20GW Renewable Energy capableness by 2025 and 2030 respectively. JM Financial maintains BUY standing connected the stock, with a SOTP-(sum of the Parts) based people terms of ₹648.

Concerns being addressed-

Analysts astatine Jefferies India Pvt Ltd portion said that JSW Energy 4Q results were broadly successful enactment with expectations, nevertheless highlighted immoderate Investor concerns . These pertain to unit insubstantial of Central Electricity Regulatory Commission suggesting a headdress connected higher extremity of merchant prices, Reserve Bank of India  draft connected further upfront task concern provisioning of 5%,  a concern broadside interest pertaining to  Rs10,000 Crore  enabling solution connected fund-raising by the company, and immoderate hold successful Unit 2 commissioning of Ind-Bharat plant.

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Jefferies analysts accidental that unit insubstantial is not a draught regularisation and lone discusses speech pricing. Further aboriginal bids should origin higher involvement costs if RBI draught goes done nevertheless connected concern broadside concerns Jefferies said that absorption highlighted that Rs10,000 Crore fund-raising solution is lone an enabling 1 and specified resolutions taken successful the past haven't led to fund-raising.

Jefferies analysts forecast 33% Earnings CAGR (compounded yearly growth) during FY24-27. Their people terms of Rs690  values JSW Energy astatine 16 clip Enterprise Value to Ebitda based connected September 2026 estimates, which are person to the little extremity of the 15-20 times scope it traded astatine station 2010 listing erstwhile capableness was visibly rising astir 2 times. 

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions

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Published: 10 May 2024, 03:59 PM IST