JSW Energy a good investment bet, says SP Tulsian

JSW Energy is a good investment bet and the stock may see Rs 90, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “JSW Energy, as you have rightly said it is all because of the control on the feed cost because it is very difficult to take a call that at what rate the coal has procured and all that. If you recall earlier these all companies because of the higher fuel cost or higher coal cost they used to operate at 80-85 percent and this fixed cost component because is very high in case of the power plant that is seeing the improved bottom-line. But in spite of that whatever gain or whatever efficiency which we have seen coming in must have come in, in respect to the one item that is the raw material or the feed stock of the plant.”
He further added, “Their Barmer plant is based on the lignite and though we are taking an average of the raw material cost of their all plants put together and seeing a down of about 4 percent on the raw material cost, but I think Barmer since it is based on the lignite must have given them the better efficiency. So if you are convinced about the raw material procurement which generally I am, last week also I have said that I am holding my positive view on all power generation companies because they are virtually ruling at its low, so taking all these into consideration the investment call can be taken on the stock because of this better Plant Load Factor (PLF) going forward which I expect to remain above 90 percent plus.”