SJVN shares gain over 7% on strong Q1 operating performance, margin expansion

Shares of state-run SJVN Ltd. rose more than 7% in early trading Wednesday after the company reported its June quarter results after the market opened on Tuesday.

Revenue for the quarter rose 29% to ₹ 870.4 crore, while Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) rose 33% YoY to ₹ 667.5 crore.

EBITDA margin in the quarter also increased by 220 basis points to 76.7% from 74.5% in the same quarter last year, while net profit stood at ₹357.1 crore, 31.4% higher than the profit of ₹271.8 crore last year.

SJVN’s installed capacity increased by 14% during the quarter, while gross generated power increased by 56.3% YoY to 3,292 million KWh. Additionally, the board of directors also gave in-principle approval to monetize partial future income/Return on Equity (RoE) of Nathpa Jhakri Hydroelectric Power Plant through securitization.

The SJVN board also approved dilution of shares in the company’s wholly-owned subsidiary SJVN Green Energy Ltd., subject to approval from the Department of Disinvestment (DIPAM) and the Ministry of Power.

Three out of six analysts covering SJVN have given the stock a “buy” and a “sell” rating.

At the current price, SJVN is trading at a one-year forward price-to-earnings multiple of 26.1x, well above its five-year average multiple of 16.8x.

SJVN shares are currently trading 6.5% higher at ₹146. Before today’s rally, the stock had corrected 15% from its recent peak of ₹161. PSU shares have gained 58% so far in 2024. Over a 12-month period, the shares have gained 154%.