JSW Energy

The company with a operational capacity of 2600 MW and a generating capacity of 1050 MW in the construction and implementation phase posted good numbers for Q3FY13. Much better than what the market had expected and this reflected in the stock price, which yesterday remained strongly in the green. YoY, it has been a turnaround with a consolidated net profit at Rs.310 crore v/s the net loss of Rs.83 crore. Sequentially, net profit rose 22% and this was on the back of a 14% rise in net sales at Rs.2329 crore. The company kept a very tight leash on its operating costs, giving a very healthy EBIDTA margin at 35.4%, up 1560 bps on a YoY. Fuel costs were actually down 5% (QoQ). The net profit is all the more appreciable given the forex loss of Rs.61 crore and a 39% surge in tax outgo. Thus, Q3 was better due to increase in generation, improved tariff and relatively lower fuel cost. 

Plant Load Factor was at 91.34% as against 82.30% in the corresponding quarter of the previous year. Net generation was at 4,770 million units, up 20% on YoY. The good numbers were also on the back of improved operations of the Barmer unit while the Vijayanagar & Ratnagiri plants continued to maintain high availability.  The company achieved the highest quarterly net generation of 4770 MU’s, despite intermittent backing down of some units during the quarter. During current Q3, the company sold net 110 million units banked on YoY and merchant sales during the quarter were 2,616 million units (54%) and the sales under Long Term PPA were 2,043 million units (42%). The company has also generated 221 million units (4%) under the Conversion Agreement during the quarter. 

Its 1200 MW plant at Ratnagiri is almost near completion, with FGD for 2 units were commissioned in Q3FY13 while another FGD was further commissioned in January 2013.  The last FGD is expected to be completed by end February 2013. Unit no-5 and 8 at the 1080 MW plant at Barmar is expected to start generating power before end of FY13. Approvals are awaited for enhancement of lignite mining for the balance units. The project cost is estimated at Rs. 7,223 crore and project expenditure incurred upto December 31, 2012 is Rs.6,740 crore. Looking ahead, the company expects imported coal prices to remain under pressure till the global economic outlook improves and merchant prices are also expected to be under pressure with the addition of new generation capacities and as issues on the availability of raw materials to these units get addressed.