JSW Energy Ltd. share price target

JSW Energy (JSWEL) reported consolidated revenue / EBITDA / PAT of Rs22.5bn / Rs6.5bn / Rs1.8bn (+18.7% / -21.0% / -44.6% YoY) respectively, for Q3FY23. However, adjusting for the Rs1bn (pre-tax) prior period sales during Q3FY22, PAT was lower by 27.8% YoY.

JSW Energy (JSWEL) reported consolidated revenue / EBITDA / PAT of Rs23.9bn / Rs8.9bn / Rs4.7bn (+14.4% / -4.3% / +37.3% YoY) respectively, for Q2FY23.

JSW Energy (JSWEL) has agreed to acquire the 1,753MW RE portfolio of Hyderabad-
based Mytrah Energy for net EV of Rs105.3bn, or 6.4x normalised EBITDA of Rs16.5bn
at P90 levels (FY22 EBITDA was Rs12.4bn).

JSW Energy’s (JSWEL) Q4FY22 reported consolidated revenues / EBITDA / PAT were Rs24.4bn / 11.3bn / 8.6bn (+55% / +79% / +711% YoY) respectively. However, there was a one-time gain of Rs5.2bn / Rs4.9bn at EBITDA / PAT levels respectively due to the tariff true-up order for Karcham Wangtoo HEP for the period FY15-FY22

JSW Energy’s (JSWEL) Board has approved the reorganisation of the company’s green and grey businesses. Its RE business (operational: 1,391MW hydro & 10MW solar; under construction: 240MW hydro & 2,218MW of solar + wind) will be housed under a new wholly-owned subsidiary – JSW Neo Energy. The thermal business (3,158MW) will continue to be part of JSWEL.

1 August 2020 JSW Energy (JSWE)s results reflected the impact of lower merchant sales volumes due to lower power demand and merchant prices. At a consolidated level, EBITDA was down 8% YoY to INR7.5b. Debt reduction continues, with net debt (incl. acceptances) declining ~INR1.6b during the quarter. Interest cost also decreased by 11% YoY. Furthermore, FCF generation would continue to be strong given ~80% of JSWEs capacity is under long-term PPAs. account of lower short-term sales. Short-term sales volumes declined 83% YoY to 123MU. Interest cost fell 11% YoY to INR2.5b given the debt reduction. Other income was up 58% YoY to INR0.8b, led by write-backs of INR0.3b.

20 May 2020 JSW Energy (JSWE)s results reflected an improved performance in the S/A business YoY, aided by lower interest costs on account of debt reduction. At a consol level, EBITDA rose 21% in 4QFY20. The acquisition of Kamalanga has been put on hold given the uncertainty surrounding recovery in power demand. While we see prudence in JSWE wanting to hold on to cash in the near term, if growth opportunities do not emerge or dividend payout is not increased, concerns may arise over capital allocation. account of higher short-term sales and lower base of the previous year for S/A (due to the timing effect in coal prices and tariff, in our view). Short- term sales volume rose 30% YoY to 736MU. Interest cost declined 10% YoY to INR2.5b given the debt reduction. PBT came in at INR0.9b (v/s INR0.1b in 4QFY19). For FY20, EBITDA/Adj. PAT was up 4%/20% YoY at INR29.6b/8.

18 February 2020 JSW Energy (JSWE) has signed a share purchase agreement to acquire GMR Kamalanga (1,050MW). We see the transaction as value accretive for JSWE, given the strategic location of the plant, room for merchant volumes, and the companys ability to reduce interest and O&M; costs post acquisition. We raise our FY21/22 EPS estimates by 15/8% to account for the takeover of Kamalanga from FY21. GMR Kamalanga (3x 350MW) is strategically located in Orissa near the coal belt region. Accordingly, variable costs are low at just INR1.5-1.6/kWh. In terms of PPA, 84% of the plants capacity is tied up under long-term agreements (25 years) with Odisha (263MW), Haryana (334MW) and Bihar (283MW). The balance 170MW is available for sale/merchant. Given the strategic location of the plant, fuel supply linkages are tied for the entire PPA. Besides, the company has recently secured another 0.4mtpa for part of its balance merchant capacity.

4 February 2020 JSWEs results highlight the impact of lower merchant volumes and prices amidst subdued power demand. EBITDA declined 14% YoY in 3QFY20. The company remains keen on tie-up of capacities, but the cancellation of the pilot scheme PPA and the delay in the commissioning of Dolvi will push back the same. Details/successful closure of proposed acquisitions are still awaited. Interest cost though declined 11% YoY to INR2.6b led by debt repayment. PBT was down 31% YoY at INR1.5b. Adj. PAT declined ~12% Standalone generation was down ~14% YoY at 2.6BU on the back of lower short-term (ST) sales volumes. ST volumes almost halved to 541MUs from 1,112MUs in the year-ago period. Hydros generation was ~6% higher YoY and helped offset the impact of new CERC norms. Hydro EBITDA was up 2% YoY at INR1.