JSW Energy drops as Q3 PAT slides 44% YoY

JSW Energy fell 4.50% to Rs 250.40 after the company reported 44.6% decline in consolidated net profit of Rs 179.61 crore in Q3 FY23 compared with Rs 323.93 crore in Q3 FY22.

Net sales rose 18% to Rs 2,248.09 crore in Q3 FY23 as against 1,905.16 crore in Q3 FY22, due to higher realisation (as higher fuel costs are pass through in nature for LT PPAs).

Profit before tax declined 42.4% to Rs 234.73 crore in Q3 FY23 as compared to Rs 407.49 crore in Q3 FY22.

EBITDA for the quarter was lower by 18% at Rs 727 crore compared to Rs 882 crore in the corresponding period of previous year. The decrease is primarily due to lower short term sales YoY, partly offset by contribution from Vijayanagar Solar and higher other income in the quarter. EBITDA margin stood at 31% in Q3 FY23 as compared to 44% in Q3 FY22.

Finance cost rose by 9% year on year to Rs 213.70 crore in Q3 FY23, due to additional borrowings (for ongoing growth capex) and increase in weighted average cost of debt to 8.29% with the rising rates cycle.

On the acquisition of Mytrah renewable energy (RE) assets 1,753 megawatt (MW) transaction is in advance stages with closure expected in Q4 FY23 and lnd-Barath 700 MW completed acquisition pursuant to NCLT order under IBC. Project revival plan is in progress, expected commissioning of 700MW in 24 months.

JSW Energy is pursuing a growth strategy to expand its installed capacity to 10 gigawatt (GW) by FY25 and 20 GW by FY30, along with foraying into energy products and services. With current locked-in capacity of 9.9 GW the company is expected to achieve its FY25 capacity target well ahead of the articulated timelines.

As per the World Bank's latest publication titled "Global Economic Prospects" (January 2023), global growth rate is revised down to 1.7% for 2023. The outlook reflects synchronous policy tightening to contain high inflation, worsening financial condition and disruption from the ongoing Ukraine conflict. For India, the Work Bank estimates GDP growth of 6.6% in 2023 and 6.1% in 2024.

As per the Reserve Bank of lndia (RBI), India's GDP saw a growth of 6.3% YoY in Q2 FY23 led by private consumption demand and investment demand. RBI has estimated a 6.8% growth in real GDP in FY23, lower from its earlier forecast of 7.0%. The RBI also in its recent MPC meet has announced a further rate hike of 35 bps to 6.25%.

JSW Energy is primarily engaged in the business of generation of power with principal places located at Vijayanagar (Karnataka), Ratnagiri (Maharashtra), Nandyal (Andhra Pradesh) and Salboni (West Bengal).

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