Shares of JSW Energy have given more than 300% returns to its shareholders in the last one year, aided by the operational performance of its plants, capacity expansion, and diversification of the business even during the pandemic. Going forward, the company’s ability to service its debt, maintain ample liquidity and profitability would be key areas investors should consider before making investments.

The largecap power stock has grown precisely by 307% over the past one year, with its share price surging from ₹77.35 on January 20, 2021, to ₹314.8 in intraday trade on the BSE today. In comparison, the benchmark index BSE Sensex gained 20% during the same period, while the BSE Power index climbed 86%.

An investment of ₹1 lakh in JSW Energy, a part of the JSW Group, on this date last year would be worth more than ₹4 lakh today.

How JSW Energy shares fared in the last one year

The multibagger stock has delivered consistent returns throughout the year. It has risen 55% over the last six months and 10% over the past one month. In the last one week, the share of the country’s leading private sector power producer gained 1.5%.

On Thursday, JSW Energy share price opened lower and declined as much as 2.45% to touch an intraday low of ₹304.3, against the previous closing level of ₹311.95. Shaking off early losses, the stock gained 0.5% to hit a day’s high of ₹314.8 during trade so far. With a market capitalisation of ₹51,458 crore, the share was trading 23% lower than its 52-week high of ₹408.7 touched on October 14, 2021. The stock had hit its 52-week low of ₹69 on February 2, 2021.

On the technical front, the stock was trading at a fair value compared to its average historical valuations and was moving higher than 5-day, 20-day, 50-day, and 200-day averages, but lower than 100-day averages. The share turned ‘Mildly Bullish’ from ‘Bullish’ on November 3, 2021, at ₹331.50, as per stock research platform Markets Mojo.

Posts strong earnings in Q3 FY22

In the recently concluded December quarter of the current fiscal, Sajjan Jindal-led JSW Energy reported 162% year-on-year growth in consolidated net profit at ₹324 crore, driven by higher revenues. Net sales rose by 17.6% to ₹1,893 crore in December quarter of this fiscal over the corresponding period of last year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) surged 35% YoY to ₹882 crore, the highest in the same quarter in the previous five years, driven by a spurt in short term sales and realisation.

As of December 31, 2021, the consolidated net worth and net debt stood at ₹16,082 crore and ₹6,021 crore, respectively, while cash balance was at ₹2,195 crore.

During the quarter under review, the company’s board approved reorganisation of its businesses. The renewable energy business (green) is to be housed under “JSW Neo Energy’, a wholly-owned subsidiary of JSW Energy, while the thermal businesses (grey) will remain under JSW Energy and other existing subsidiaries.

What lies ahead

Going forward, the company aims to scale up its capacity to 10 gigawatts (GW) by FY25 and 20 GW by FY30, from 4.6 GW now, primarily through the new renewable energy arm. The company’s current operational portfolio comprises 30% renewable energy capacity, which is expected to expand around 70% by FY25 and around 85% by FY30.

The company in its December quarter report said that over the medium term, the power sector outlook is healthy, as rapid urbanisation and stabilisation of various government schemes are expected to boost overall power demand. It is constructing various renewable power projects to the tune of 2.5 GW, with an aim to achieve a power generation capacity of 20 GW by the end of the year 2030.

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