Emkay Global Financial is bullish on JSW Energy has recommended buy rating on the stock with a target price of Rs 58 in its research report dated May 20, 2020.
Emkay Global Financial's report on JSW Energy
Management is currently re-evaluating the GMR Kamalanga deal as the current Covid-19 concern has significantly impacted the power demand, thus providing a bleak outlook for the thermal sector. Management has indicated very low visibility towards deal execution. Q4FY20 net generation declined 2.7% yoy to 4.1bn units as a steep fall in thermal plants was offset by strong generation across its hydro stations. Average realization too fell 4.2% yoy to Rs4.4/unit, while revenues declined 6.8% yoy to Rs17.9bn.
We have lowered our earnings estimates for FY21/FY22 to factor in a fall in long-term power demand amid Covid-19 concerns. Accordingly, we have cut our TP to Rs58 vs. Rs73 earlier. However, the stock price has corrected significantly during the current downfall in the market and is attractively valued at CMP. Hence, we retain Buy.
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