JSW Energy sizzles after strong Q3 earnings

JSW Energy rose 3.69% to Rs 315 after the company's consolidated net profit surged 162.23% to Rs 323.93 crore on 17.69% increase in net sales to Rs 1,893.54 crore in Q3 December 2021 over Q3 December 2020.

On a consolidated basis, profit before tax (PBT) soared 131.65% to Rs 407.49 crore in Q3 December 2021 over Q3 December 2020.

During the quarter, total revenue increased by 20% YoY to Rs 1,984 crore from Rs 1,659 crore in Q3 FY21, primarily due to increase in short term sales and realisation.

As a result, EBITDA for the quarter was higher by 35% YoY at Rs 882 crore vis-a-vis Rs 655 crore in the corresponding period of previous year. The company continues to deliver strong EBITDA on the back of stable cashflow from long-term portfolio, superior operations and maintenance (O&M) practices, with opportunistic gains from buoyancy in the short-term markets.

Underlying finance cost during the quarter decreased by 10.5% YoY to Rs 171 crore from Rs 191 crore in the corresponding quarter of previous year. However, there was an additional finance cost of Rs 25 crore pertaining to interest on regulatory liabilities during the quarter.

The consolidated net worth and consolidated net debt as on 31 December 2021 were Rs 16,082 crore and Rs 6,021 crore, respectively, resulting in a Net Debt to Equity ratio of 0.37x and Net Debt/TTM EBITDA of 1.74x. The liquidity continues to be strong with cash balances at Rs 2,195 crore as of 31 December 2021.

Long term sales during the quarter slightly decreased YoY to 4,173 million units (versus 4,300 million units in Q3 FY21) primarily due to lower sales at Ratnagiri, (impacted by maintenance activities), partially offset by higher sales at Vijayanagar plants and hydro plants.

Short term sales during the quarter stood higher by 3% YoY at 323 million units (versus 312 million units in Q3 FY21) primarily due to higher short term sales at Vijayanagar.

The company's diversified portfolio and favourable placement in Merit Order Despatch underpins generation and offtake.

The company said that over the medium term, power sector outlook is healthy, as rapid urbanization and stabilization of various Govt. schemes are expected to boost overall power demand. Going forward, renewable energy capacity addition is expected to meet the incremental power demand. The financial health of discoms continues to be a key concern.

JSW Energy's current operational portfolio comprises 30% renewable energy capacity. This is expected to pivot to ~70% renewable energy by FY25 and ~85% renewable energy by FY30. With one of the strongest balance sheets in the sector and a profitable and cash generative operating portfolio, the company said it is well positioned to pursue its growth aspiration.

JSW Energy is one of the leading private sector power producers in India and part of the $13 billion JSW Group. JSW Energy has established its presence across the value chains of power sector with diversified assets n power generation, and transmission.

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