Sell JSW Energy, target price Rs 156: ICICI Direct

ICICI Direct has a sell call on JSW Energy Ltd. with a target price of Rs 156. The current market price of JSW Energy is Rs 295.

JSW Energy Ltd., incorporated in the year 1994, is a Mid-Cap company (with a market cap of Rs 48774.81 Crore) operating in Power sector.

JSW Energy Ltd. key Products/Revenue Segments include Power, Power Generation, Sale of services, Interest and Other Operating Revenue for the year ending 31-Mar-2021.


Investment Rationale
Though there is an immense potential for capacity addition in the RE space, ICICI Direct states, it would be more comfortable for the brokerage to assign a higher multiple to RE platform once the overall annual bidding picks up from 10GW to 25-30GW. On FY24E basis, assuming 8x EV/EBITDA for grey business, CMP implies 13x EV/EBITDA multiple for the green business, slightly lower vs global peers. ICICI Direct has assigned 10x FY24E EV/EBITDA to RE capacity, in line with NTPC and Tata Power.

Financials
For the quarter ended 30-09-2021, the company has reported a Consolidated Total Income of Rs 2237.36 Crore, up 20.32 per cent from last quarter Total Income of Rs 1859.53 Crore and up 11.89 per cent from last year same quarter Total Income of Rs 1999.52 Crore. Company has reported net profit after tax of Rs 334.32 Crore in latest quarter.

Promoter/FII Holdings
Promoters held 74.66 per cent stake in the company as of 30-Sep-2021, while FIIs owned 5.92 per cent, DIIs 7.49 per cent.