JSW Energy Ltd. share price target

EBITDA margin contracted by 614bps to 27.9% in 4QFY18 vs. 34.1% in 4QFY17 due to increase in global coal prices. Adjusting for JPVL's liability, its net debt reduced by Rs31.06bn in FY18. Cost of debt dipped by 114bps YoY in 4QFY18, which brought down borrowing cost to Rs3.2bn from...

Q3 EBITDA was exactly in line with our estimate at Rs 5.8 bn. Despite surge in imported coal prices, earnings was maintained due to higher efficiency (O&M; cost saving) and 20% YoY decline in interest cost.

Maintain REDUCE on High Exposure to Merchant Biz, Rising Coal Prices JSW Energy (JSWEL) has reported 4.7% YoY growth in revenue to Rs19.9bn in 3QFY18 owing to higher generation (+6.5% YoY) and other income (+74% YoY to Rs0.87bn). Led by higher realisation and other income, JSWEL's PAT zoomed by 181% YoY to Rs506mn compared to Rs180mn in 3QFY17. Proposed foray into electric vehicle business announced during 1QFY18 Conference Call having the least cash inflow visibility may warrant a de-rating of the stock, in our view. Rolling over our estimates to FY20E, we maintain our REDUCE recommendation on the stock with a revised Target Price of Rs74 (from Rs72 earlier)....

Consolidated generation increased 6.5% YoY to 4.9BU, driven by ~25% YoY generation increase at Ratnagiri (shutdown impact in the base quarter). Interest cost declined ~120bp YoY/~30bp QoQ to ~9%, led by refinancing of loans. Gross debt reduced by ~INR25b in 9MFY18 on operating cash flows and a reduction in debtor days (26 days w.r.t 4QFY17). Against advance of ~INR10b to JPVL, it has adjusted INR2.4b from payments to be made to JPVL. JSWE is in discussion with banks for the recovery of the balance. Operating cost (ex-fuel) declined ~2% YoY, despite higher generation, on various efficiency measures

We met the management of JSW Energy (JSWE) and came back bullish on the stock. BIG Picture: We foresee an era of predictable earnings (100% PPAs and 25% imported coal vs. 45% currently) and accelerated growth driven by acquisition of stressed assets.

Looking ahead, we expect the demand scenario to revive in 2HFY18 in Southern India, which has been remaining lower for last couple of months. We believe expiry of high-rate PPAs and rise in global spot coal prices would drag its profitability. Further, the proposed foray into electric vehicle business offers least cash inflow visibility in near to medium-term in the absence of any expertise to compete with the established auto players, which might warrant a de-rating of the stock. Thus, we downgrade our recommendation on the stock to REDUCE from HOLD with...

In-line; sharp reduction in net debt and interest cost Merchant prices higher, but coal prices also increasing; Maintain Sell JSW Energy's (JSWE) 2QFY18 EBITDA declined 8% YoY to INR8.8b (in-line). PAT was up 37% YoY to INR2.9b due to certain one-offs in other income (+230% YoY to INR1.7b). Standalone EBITDA increased ~23% YoY (to INR2b) due to higher realization and low-cost imported coal inventory. However, it was more than offset by weakness at the Barmer power plant. Other key highlights: Impressive reduction in net debt of INR10b QoQ to ~INR127b on receivables...

Foray into Electric Vehicle Manufacturing Biz A Big Challenge JSW Energy (JSWEL) has reported a subdued performance in 1QFY18 largely due to lower generation from thermal plants and lower merchant realisation. Its revenue dipped by 8.9% YoY to Rs22.3 bn owing to 4.4% YoY decline in generation and lower average realisation of Rs3.5/unit vs. Rs3.6/unit in 1QFY17. In line with our estimate, its PAT declined by 38.9% led by lower generation and higher fuel cost. Net generation declined by 8.9% YoY to 4,017mn units mainly due to lower system demand. JSWEL announced foraying into electric vehicle business with investment of Rs40bn in next 3...

Revenue fell by 2.22% to Rs. 1862.08 Cr in Q4FY17 when compared to the previous quarter. Also it fell by 29.22% when compared with Q4FY16.