JSW Energy Posts Strong PAT Growth

JSW Energy has posted strong September quarter results, registering a robust operational and financial performance. On the back of the company’s new capacity additions carried out this fiscal, its revenues rose sharply by 108 per cent to Rs 2,077 crore. The net profit was at Rs 259 crore as against net loss of Rs 109 crore in the corresponding quarter last fiscal. 

Currently the total operational capacity of the company is at 2,600 MW, which is significantly high compared to 2,030 MW during the September quarter of last fiscal. Due to new capacity additions, its total of generated units increased by 77 per cent to 4,593 million. The plant loading factor or PLF (plant efficiency) was also high at 87.79 per cent as compared to 63.58 per cent in the corresponding quarter last fiscal. The company operated its Vijaynagar plant at 100 per cent PLF while its Ratnagiri plant’s PLF was at 90 per cent. The Barmer plant however saw lower PLF at 64 per cent due to planned maintenance at one of its units. 

The company sold a total of 2,201 million units of electricity through the merchant route. It also sold 1,723 million units through long-term power purchase agreements. JSW Energy has also reported a boost in its EBITDA margins due to high generation, better realisations and relatively lower fuel cost. The Rajasthan Electricity Regulatory Commission revised the interim tariffs for power purchased from the Barmer plant from Rs 3.3448 per unit to Rs 3.6271 and this has been factored in the result. The merchant tariffs also remained better at Rs 4.17 per unit during the quarter due to delayed monsoon. 

The company uses imported coal to fuel its power projects. The cost of imported coal remained range-bound at around USD 85 a tonne in the quarter. The rupee appreciation as well as downward fluctuation of the international coal prices also helped the company to report two-fold growth in its EBITDA margins. The fuel cost increased by 44 per cent during the quarter as against 108 per cent growth in its revenues. As a percentage of sales, fuel contributes 54 per cent while the same was 79 per cent in the corresponding quarter last fiscal. The EBITDA margins grew from 12.45 per cent in September 2011 to 28.29 per cent in September 2012. 

The company has also banked 272 million of units during the quarter. Banking of power is a barter deal with the utilities wherein power generated is supplied to utilities which is later returned on demand. The banked power will be available for sale from November 2012 to March 2013. 

JSW Energy’s total interest paid rose from Rs 151 crore to Rs 228 crore. It has a total debt of Rs 9,301 crore with a debt to equity ratio of 1.56x which we believe is comfortable. The company is also in the process of synchronizing 540 MW of power at its project in Barmer. The commissioning is expected in the next calendar year. With the decline in coal prices and rise in realisations, we expect a good set of numbers in the next quarter too. Investors may therefore take a short exposure to the scrip.