JSW Energy Ltd. share price target

JSW Energy announced the acquisition of a 500MW power plant at Bina (MP) from Jaiprakash Power Ventures. Bina is a low-risk acquisition as the plant has (1) Regulated PPA with MP DISCOMs for 70% capacity (65% on regulated RoE and 5% on variable cost) and (2) An FSA with Coal India.

JSW Energy announced the acquisition of a 1,000MW power plant at Tamnar (Chhattisgarh) from Jindal Steel and Power. The plant does not have any PPA in place and there is uncertainty about fuel supply. JSPL is currently procuring coal from e-auctions. Proximity to a number of coal mines will keep landed cost of coal low.

We reinstate coverage on JSW Energy with a BUY. The stock has corrected ~40% in the trailing year owing to (1) A bearish outlook for merchant prices and (2) Probable acquisition of a 1,050MW under-construction power plant from Monnet Power, which may pose a medium-term risk to profitability and leverage of the company.

JSW Energy (JSWEL) has reported Rs26.8bn revenue in 4QFY16 registering 22.6% yoy growth, in line with our estimate backed by increased generation capacity. Recent acquisition of 1,391MW hydel capacity aided led to total 4,531MW generation capacity from 3,140MW that aided good revenue performance. Its EBITDA grew 27.7% yoy to Rs11.3bn but reported PAT declined 6.1% yoy in line with our estimates due to higher interest cost (up 61.7% yoy), depreciation costs (up 33.9% yoy) and loss in hydro assets (Rs730mn). At current valuation of 1.0x P/B its FY18E, provides margin of safety. Thus, we reiterate our BUY recommendation...

JSW Energy (JSWEL) reported revenue of Rs26.4bn in 3QFY16; a growth of 11.3% yoy in line with our estimate. Recent acquisition of Hydro capacity of 1,391MW aided in increased generation capacity from 3,140MW to 4,531MW which led to a good revenue performance. EBITDA, too grew by 22.3% yoy to Rs11.9bn but reported PAT disappointed us as it was down by 15.6% yoy below our expectation due to higher interest cost (up 58% yoy). With sustainable core RoEs of 15-17%, we believe current valuation at 1.2x P/B its FY17E, provides margin of safety. Hence, we upgrade our recommendation from SELL to BUY with a Target Price of Rs89....

JSW Energy Ltd. (JSWEL) (a part of USD 11bn JSW Group), is an integrated power company having presence across the industry value chain (including lignite mining, power generation, power transmission & trading and power...

JSW Energy (JSWEL) reported revenue of Rs25.3bn in 2QFY16; a growth of 12.4% yoy above our estimate on account of increased generation capacity from 3,140MW to 4,531MW due to recent acquisition of Hydro capacity of 1,391MW. EBITDA grew by 17.7% yoy to Rs9.9bn and reported PAT rose by 54.4% yoy to Rs4.7bn. We believe that the growth momentum has started tapering off hence maintain our SELL...

JSW Energys 4QFY15 APAT of Rs 3.3bn was below our estimate of Rs 3.9bn primarily due to higher maintenance expenses. Acquisition of Jaiprakash Power Ventures (JPVL) 1.3GW operational hydro plants is expected to be finished by Jul-15 vs. May-15 earlier.

JSW Energys 3QFY15 APAT of Rs 3.8bn was ahead of below our estimate of Rs 3.2bn primarily due to lower other expenses and interest costs. Acquisition of Jaiprakash Power Ventures (JPVL) 1.4GW operational hydro plants is expected to be finished by 1QFY16.