JSW Energy: Q1FY15 Result Analysis

JSW Energy, a Sajjan Jindal-controlled power company, reported its first quarter result for the financial year 2015. The company reported a 51% robust growth in net profit for the quarter ended June at Rs 325 crore against Rs 214 crore in the same period last year. Surprisingly, the company’s total income rose just 4% to Rs 2558 crore during the said quarter from Rs 2472 crore in the same period year-ago. The growth in the revenue is pre-dominantly because of merchant sale of power and tariff revision. Shares of the company rose 1.54% to Rs 82.20 on bourses.

Further, as far as 240 MW power project at Kutehr, Himachal Pradesh is concerned, the land acquisition process for the project is in progress with acquisition of all the requisite environmental clearances. As far as Barmer Lignite Mining is concerned, the Ministry of Environment and Forest approval is awaited for enhancement of mining capacity at Kapurdi to 7 MTPA pursuant to completion of all due processes.

During the reported quarter, JSW Energy achieved a net generation of 5006 million units. Furthermore, the Barmer plant registered a marked improvement in generation and registered deemed PLF of 92% as against an average deemed PLF of 73% in the corresponding quarter of the previous year. Vijayanagar plant achieved average PLF of 98% as against 102% in the corresponding quarter of the previous year. However, Ratnagiri plant operated at an average PLF of 68% as against an average PLF of 83% in the corresponding quarter of the previous year.

The power sector continues to reel under low off-take, falling tariff, increasing costs and fuel uncertainty. However, the new government appears to be focused upon addressing concerns around adequate fuel availability, power purchase agreements and thrust on T&D development which should augur well for the industry in the longer term.