Target: ₹242
CMP: ₹293.05
JSW Energy’s (JSW IN) Q1 revenue declined 3.3 per cent YoY to ₹2,927.90 crore from ₹3,026.30 crore in Q1FY23. Incremental revenue from Mytrah and RE capacity addition were offset by lower realization in thermal on account of a drop in coal prices. We maintain Sell, given expensive valuations.
Overall, generation rose 14 per cent YoY to 6,699MUs. Higher generation at Ratnagiri facility (up 28 per cent YoY) was partially offset by lower generation at hydro facility, down 27 per cent YoY. Renewable net generation rose 35 per cent YoY in Q1FY24 to 2,258MUs, led by contribution of 911MU from the recently-acquired Mytrah RE assets, Vijayanagar solar plant and part-commissioning of SECI X Wind (130MW). Net generation from hydro assets was down 27 per cent YoY due to lower water flow in Q1FY24.
We raise FY24E/25 earnings estimates 6 per cent/43 per cent as we introduce earnings from Mytrah and Ind Barath projects (acquired recently). Accordingly, we raise our TP to ₹242 from ₹193.
At the current market price, JSW is trading at 28.8x FY25E P/E and 15.5x FY25E EV/EBITDA. We maintain Sell, given expensive valuations.