JSW ENERGY LTD – BETTER SHOW IN RENEWABLES AND THERMAL DURING FY24

JSW ENERGY LTD, a Sajjan Jindal Group Company and headed by Parth Jindal, increased their profitability due to better showing by its thermal as well as renewable units.

During FY24, its net generation increased by 27% on YoY basis to 27.9 Billion Units( BUs). Out of this,its Renewable Energy (RE) generation contributed 9.3 BUs on account of its increase in ?generation by 54% YoY.

Generation under the Long Term Power Purchase Agreements (PPA) also increased by 22% in comparison to FY23. But, there was lower Hydro generation at 369 MUs(- 12% YoY) partly offset the increase in Thermal and RE.

Against FY24, consolidated Total Revenue of Rs.11,941 Crore (FY23-Rs.10,867 Crore, Up-10%) including Other Income of Rs.455 Crore (FY23- Rs.535 Crore), its consolidated EBITDA? for FY24 increased by a whopping 53% YoY to Rs.5,837 Crore with EBITDA margin of 49% (FY23-35%) and it booked 2nd highest Profit After Tax (PAT) of Rs.1,723 Crore (FY22- Rs.1,729 Crore), an increase of 17% on YoY, during its last 15 years period.

Its Days Sales Outstanding?(DSO) terms improvement ?from 60 days in FY23 to 54 days in FY24 resulted in better Cashflow position. It is also mentioned that there is no history of any bad debts from routine long term trade receivables.

During FY24, out of net Generation of 27.9 BUs, 88% (FY23-92%) distributed for Long Term PPA and remaining 12% (FY23-8%) for Short Term Agreements.

The Board of Directors ?has recommended 20% Dividend on its Equity Shares subject to approval of Shareholders at the ensuing AGM.

The Company,during Q4FY24, commissioned ?Unit-1(350 MW) of Ind-Barath Thermal Power Project and expects to commission Unit-2 (350 MW) during Q1FY25. Its entire generation is for merchant power distribution.

Recently, JSW?Renewable Technologies Ltd, a subsidiary of JSW Energy Ltd, signed a licensing agreement with SANY Renewable Energy to manufacture wind turbine generators (WTGs) in India.

In addition to that, JSW Renew Energy Five Limited (JSW Renew Five), a wholly-owned subsidiary of JSW Neo Energy Limited ( JSW Neo) and step-down subsidiary of JSW Energy Limited , has signed Battery Energy storage Purchase Agreement (BESPA) for the first project of 250 MW / 500 MWh standalone Battery Energy Storage System(BESS) out of the total awarded project capacity of 500MW /1,000MWh (two projects each of 250 MW / 500 MWh) with Solar Energy Corporation of India Limited (SECI),

?JSW Neo has also completed acquisition of 30 SPVs comprising of 1,753 MW of Renewable Energy from Mytrah Energy (India) Pvt Ltd and its Subsidiaries for a net consideration of Rs.2,770 Crore during the year( FY23- 28 SPVs, FY24 -2 SPVs).

JSW Renewable Energy (Coated) Ltd, another wholly owned Subsidiary of the Company, also completed acquisition of 45 MW of Wind based Renewable Energy Project from Reliance Power Ltd, on a slump sale basis, on 12.04.2024.

Like Tata Power, they have not offloaded a portion of its shareholding in RE in favour of investors at a favourable valuation,till now. But, that is not ruled out in the coming months/years.

JSW Energy has total capacity of 13,240 MW – Thermal – 3,858 MW (Operational – 3508 MW including 18MW TPP at Nandyl, Under Construction- 350 MW),Renewable- 9,382 MW (Wind-4,676 MW, Solar-3,075 MW, Hydro-1,631 MW, Operational – 3,782 MW, Under Construction-2,200 MW, Pipeline -3,400 MW)

The company has also signed MoUs with JSW Steel to set up renewable generation capacity and energy storage projects of 2.7 GWh, which will be progressively developed by 2030.

It has 5 thermal units as on 31.03-2024. Operational capacities of those units namely Ratnagiri at 1200 MW,? Barmer at 1080 MW, Vijaynagar at 860 MW , Ind-Barath at 350 MW and Nandyl at 18 MW. Long Term PPA tied up for Ratnagiri-91% , Barmer-100%, Vijaynagar – 38% and Nandyl -100%.

As regards Solar and Wind segments are concerned , its entire capacity is fully covered by Long Term PPA. For Hydro, 97% of capacity is covered by Long Term PPA.

Average Deemed Plant Load Factor(PLF) for thermal units was much better during FY24 at 86% against 76% during FY23. ?

It is to be noted here that on supply side, total Installed Capacity of India stood at 442 GW (Thermal – 55%,Renewables -33%, Hydro & Nuclear -12%. Sector-wise-? Central Govt -52%, State Governments -24%, Private Sector -24%. ) as on 31-03-2024 and power demand during FY24 increased by 7.5% YoY.

Company’s Net Debt stood at Rs.26,636 Crore (Operational Projects – Rs.16,795 Crore, Capital WIP – Rs.9,841 Crore) as on 31-03-2024 against Rs.26,286 Crore( Operational Projects – Rs.18,396 Crore, Capital WIP – Rs.7,890 Crore) as on 31-03-2023.

Its Net Debt/EBITDA (excluding CWIP) stood at 2.9x during FY24. Adjusted Net worth(adjusted for value of investments net of tax) of the Company as on 31.03.2024 was Rs.15,501 Crore (31.03.2023-Rs.15,336 Crore) and Cash Returns on Adjusted Net Worth during FY24 was 21% ( FY23-20%).

During FY24, they took New Debt of Rs.2,759 Crore and Repaid Rs.419 Crore. In addition to that, the Its Net Debt/EBITDA (excluding CWIP) stood at 2.9x during FY24. Adjusted Net worth(adjusted for value of investments net of tax) of the Company as on 31.03.2024 was Rs.15,501 Crore (31.03.2023-Rs.15,336 Crore) and Cash Returns on Adjusted Net Worth during FY24 was 21% ( FY23-20%).

During FY24, they took New Debt of Rs.2,759 Crore and Repaid Rs.419 Crore. In addition to that, the Company raised Rs.5,000 Crore during FY24, by way of placement of 10,30,92,783 Equity Shares of Rs.10 each at an issue price of Rs.485 PER Equity Share (at a Discount of Rs.25 per Equity Share to the Floor Price of Rs.510.09 per Equity Share) to the Qualified Institutions.

Average Cost of Debt during FY24 increased by 28 basis points to 8.64% PA (FY23-8.36% PA).

Company’s negotiations with Shortlisted bidders for South African Coal Mining Rights and related assets, for which the Board of Directors had given in-principle approval during Q4FY23, remained inconclusive and hence the proposed sale has been discontinued.

The Board of Directors of the Company in its meeting held on 07.05.2024 has approved raising of funds not exceeding Rs.10,000 Crore in one or more trenches , through the issuance of eligible Securities of the Company by way of private offerings and/or on a preferential allotment basis and/or Qualified Institutions Placement or any other method or combination thereof. It is awaiting for approval from the members at the ensuing Annual General Meeting (AGM).

The Board also approved an alteration of the Main Objects of the Memorandum of Association (MoA), subject to approval of shareholders, to provide more clarity and specific details encompassing the terminologies of the non conventional/renewable energy business and also to newer areas of business.

Its Equity Shares closed at the BSE on 18.05.2024 at Rs.597.50 with a total market capitalisation of Rs.1,04,429 Crore.

The Power Sector outlook , over the medium term looks healthy due to rapid urbanisation, Government led capex and strong investment cycle are expected to boost overall power demand. But supply increase is expected to lag demand growth over the medium term.

And JSW ENERGY LTD with strong foundation, is ready to face any situation – positive or negative in the coming years.

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