JSW Energy Shares Drop 5% on Weak Q2 Results
JSW Energy Ltd. shares fell 5% in early trading after reporting a 17% YoY decline in Q2 FY24 net profit. The stock opened at ₹475.50 (BSE), down from ₹498.75, as investors reacted to higher fuel costs and lower generation.
Q2 Earnings: Key Concerns
- Net Profit: ₹210 crore (down 17% YoY).
- Revenue: ₹2,990 crore (up 4% YoY).
- Key Drags: Elevated coal prices, lower hydropower output.
- Growth Plans: 2.6 GW renewable projects underway.
Analyst Views: Buy, Sell, or Hold?
- CLSA: Downgraded to ‘Sell’ (TP ₹400) – weak earnings, rising debt.
- Motilal Oswal: ‘Neutral’ (TP ₹460) – near-term thermal sector risks.
- ICICI Securities: ‘Buy’ (TP ₹530) – bets on renewable expansion.
Investment Strategy: Pros & Cons
Buy/Hold Arguments:
– Strong renewable pipeline (target: 20 GW by 2030).
– Govt. tailwinds in clean energy.
– Valuation dip may attract long-term investors.
Sell/Avoid Reasons:
– Margin pressure from coal costs, interest rates.
– Net debt at ₹23,500 crore.
– Competition from Tata Power, NTPC.
Technical Analysis
- Trend: Below 200-DMA (bearish signal).
- Levels: Support at ₹460; resistance at ₹500.
Verdict
- Long-term investors: Accumulate on dips.
- Traders: Wait for breakout above ₹500.
- Risk-averse: Monitor debt and margin trends.
Disclaimer: Not investment advice. Consult a financial advisor.
