Lower international coal price price and strong tariffs helped JSW Energy’s earnings for the March 2012 quarter were higher than the analyst estimates. The company reported a net profit of Rs 334 crore, while the analyst estimates was Rs 311 crore. Its profit was Rs 230 crore last year and Rs 312 crore in the previous quarter.
For the quarter, the company’s capacity utilization at its 860 MW Vijayanagar plant ( Karnataka) was 101%, 82% at its 1200 Ratnagiri ( Maharashtra) plant and 73% at its 1040 Barmer ( Rajasthan ) plants. The overall FY13 was better for the company due to lower fuel price and strong merchant tariffs. Because of the strong cashflows the company’s debt to equity levels are relatively low, which helped the company to give a dividend of Rs 2 in comparison to Rs 0.50 last year.
In the current fiscal, the company is looking at selling around 20 billion units in comparison to around 18.5 billion. And will be able to maintain the profitability of the March quarter. One thing to look out for this year will be whether the company receives a tariff revision for its Rajasthan plant and if yes, how much. As any revision will be on retrospective and will have a significant impact on the company’s profitability.
At the current market price, the company’s stock is trading at a FY13 price to book value of 1.7 and an earnings multiple of 11. This looks attractive given the strong balance sheet of the company and stable outlook.
Source : The Economic Times.