Hold JSW Energy; target of Rs 66: Edelweiss

Edelweiss' research report onJSW Energy

JSW Energy (JSW) saw the trend of poor power demand continuing in Q4FY17, which in turn impacted merchant off-take and realisations thereon. This was visible from the low PLF’s at the Vijaynagar and Ratnagiri power plants. Consequently, consolidated revenues declined by 30%.

Outlook

Even though fuel cost is stabilising and currency is turning favourable, JSW’s medium term outlook appears challenging as it still has 1,160MW open-ended capacities which could continue to mar its performance in the absence of medium to long term PPAs and is a key monitorable. Maintain ‘HOLD’.

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