JSW Energy declines 4%; Morgan Stanley underweight with target Rs 50

Moneycontrol News

Shares of JSW Energy has declined 4.5 percent intraday Thursday. The company has posted 38 percent jump in its Q2 net profit at Rs 297.2 crore against Rs214.9 crore, in a year ago period.

Revenue was flat at Rs 2,049 crore versus Rs 2,047 crore, while other income increased by 230 percent at Rs 170.5 crore versus Rs 51.6 crore.

The operating income (EBITDA) was down 8.3 percent at Rs 882.3 crore and EBITDA margin was down by 390 bps at 43.1 percent.

Find out what brokerages saying about the stock:

Brokerage: Citi | Rating: Buy | Target: Rs 75

Citi said that the firm reported broadly in-line Q2 earnings. Further, it said that the company is generating healthy cashflows and has a strong balance sheet.

Meanwhile, net debt to equity has reduced to 1.13 from 1.28 in June.

Brokerage: Deutsche Bank | Rating: Hold | Target: Raised to Rs 73

The global bank observed that the company was getting back on track on the margin front, while the balancesheet strengthened further with a reduction in debt.

Brokerage: Macquarie | Rating: Underperform | Target: Raised to Rs 53

The brokerage said that Q2 surprise was largely led by other income and coal price increase will hit earnings from Q3. It also said that the management is cautious on the merchant power tariff

Brokerage: Morgan Stanley | Rating: Underweight | Target: Rs 50

The brokerage said that competition from solar implies low visibility for new coal-based PPAs. In fact, lower realisations drove the EBITDA miss, it added.

Brokerage: CLSA | Rating: Sell | Target: Raised to Rs 66

According to firm the current rally is unsustainable as return on equity deterioration has capped the valuation. It further said the lower ASPs, expiry of high-priced power purchase agreements and rise in sea-borne coal prices are key negatives.

At 12:12 hrs JSW Energy was quoting at Rs 82.70, down Rs 2.60, or 3.05 percent on the BSE.