Private power producer JSW Energy Ltd witnessed a 68.5 percent year-on-year decline in net profit for the fourth quarter, ending March 31, 2023, according to its recent exchange filing. The company reported a net profit of Rs 272.1 crore, down from Rs 864.4 crore in the corresponding quarter of the previous year.

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Despite the decline in net profit, JSW Energy experienced a 9.4 percent increase in total revenue during the period under review. Total revenue stood at Rs 2,670 crore, compared to Rs 2,440.7 crore in the corresponding period of the preceding fiscal year.

Prashant Jain, Joint MD & CEO, JSW Energy, told CNBC-TV18 that the subdued demand in April and May was a result of sporadic rains across the country. However, he mentioned two noteworthy trends going forward. First, international thermal coal prices have fallen dramatically, resulting in more attractive fuel prices for the current quarter. Secondly, merchant prices are on the rise, benefiting JSW Energy's open capacity.

Power demand grew 9% last year, expect it to grow 6-8% this year

Jain pointed out that last year, power demand grew 9.5 percent, a year before that it was 8.5 percent. So far, in the first two months, the power demand has been subdued, but it is expected that it will grow 6-8 percent this year.

"In terms of the coal availability per se last year was pretty good there was a 15 percent growth in the coal production for the country. And this year also we are going to see a good improvement and thermal coal prices are coming down. So this could be a good situation for the power sector in the next 2-3 year perspective in terms of the demand-supply situation mismatch," he added.

Jain further noted that merchant prices averaged above Rs 5 per unit, providing favourable tariffs. Last year, JSW Energy recorded approximately 1,900 million units of merchant sales, a figure expected to be surpassed this year. He anticipates a significant increase in EBITDA (earnings before interest, taxes, depreciation, and amortisation) growth, projecting a 60-70 percent YoY growth rate, with an aim to achieve a four-figure EBITDA in FY25.

Also read: JSW Energy arm commissions 51 MW of wind power capacity in Tamil Nadu

"Last year, we did close to 1,900 million units of the merchant sales and this year we are going to do better than that. And I am expecting that our margins are also going to improve. Last year, we did around Rs 3,800 crore of EBITDA, which was the second-highest EBITDA in the lifespan of the company, and previous high was in 2015 at a point when the machine prices were ruling very high. This year I am expecting there will be at least 60-70 percent EBITDA growth as compared to the previous year, and in FY25 I think we will be touching a four-figure EBITDA," he said.

Further, with the acquisition of Ind-Barath Energy, JSW Energy anticipates lowest variable costs for the pithead plant. They plan to run the unit on a merchant basis, keeping an eye on macroeconomic conditions and exploring long-term power purchase agreements (PPAs) as opportunities arise.

Also read: JSW Energy Q4 net profit slides 69% to Rs 272 crore, declares dividend of Rs 2 per share

(Edited by : Shoma Bhattacharjee)

First Published:May 24, 2023 5:53 PM IST