JSW Energy shares jumped as much as 5 percent on Friday due to the bumper earnings during the April-June quarter on the back of robust power demand. At 9:31 am, shares of the energy company were trading 4.8 percent higher at Rs 245.35 on the BSE.

A healthy buying in the shares was also triggered by positive management commentary. The company said it was well-positioned to pursue growth backed by one of the strongest balance sheets in the sector and a profitable and cash-generative operating portfolio. Its cash and cash equivalents stood at Rs 1,825 crore as of June end.

Here is a look at the company's financials:

Brokerage views

Kotak Institutional Equities commended JSW Energy for setting aggressive growth targets based on renewable energy and exploring new business opportunities for green hydrogen. "JSW Energy management demonstrated its ability to pursue return accretive growth while having evaluated several inorganic opportunities,” it said.

However, the domestic brokerage house maintained its ‘sell’ rating as it believes the current stock price discounts all the benefits of targeted capacity additions and consequential improvement in earnings all the way up to the financial year 2030.

Meanwhile, Jefferies said ‘buy’ JSW Energy shares with a target price of Rs 315, which implies an upside of 28 percent from the current market price of Rs 245.35. Kotak Institutional Equities has a target price of Rs 115.

June quarter performance

The private sector power producer said the increase in revenue and EBITDA was primarily attributable to higher contribution from short-term sales, solar capacity addition at Vijayanagar, and 45MW uprating at Karcham Wangtoo Plant in Himachal Pradesh.

The overall generation was higher by 14 percent year-on-year due to strong merchant demand, better hydrology and capacity increase in renewable energy. Total thermal generation rose 12 percent from the previous year, while total hydro generation was up by 13 percent.

Meanwhile, a healthy collections trend sustained, helping receivable days to decline by 47 percent year-on-year to 45 days.

Receivable days are the number of days that a customer invoice is outstanding before it is collected. Source: Investor presentation

Demand outlook

Over the medium term, the company believes the power sector outlook would be healthy, as rapid urbanisation and stabilisation of various government schemes are expected to boost demand.

It said that renewable energy capacity addition would likely meet the incremental power demand.

Source: Investor presentation

Prashant Jain, Joint Managing Director and Chief Executive Officer, JSW Energy told CNBC-TV18 in an interaction that he sees 2 percent growth in power demand in second quarter of FY23 and 6-8 percent in FY23.

Jain also added that the power prices will remain elevated in the coming weeks. He added that the energy company is also open to inorganic growth opportunities.

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The renewable push

JSW Energy is working on expanding from the current platform capacity of 7.3 GW to 10 GW by FY25 and 20 GW by FY30, with the entire capacity addition being driven by renewables, the company said.

JSW Energy's current portfolio of 7.3 GW comprises 57 percent renewable capacity. This is expected to pivot to about 70 percent renewable energy by FY25 and 85 percent renewable energy by FY30.

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First Published:Jul 22, 2022 10:20 AM IST