SJVN’s share price has surged by nearly 260% in just one year, providing investors with significant gains. However, domestic brokerage Elara Capital suggests caution, maintaining a “reduce” recommendation on SJVN in its latest report following the company’s Q4 results. The brokerage believes that the stock’s valuation already reflects potential near-term growth and advises monitoring project execution closely, despite a robust project pipeline. Elara Capital predicts a potential 4% decline in the stock.
Current Market Scenario
Today, SJVN’s share price opened at ₹135.75 on the BSE but was trading in the red during Friday’s session, hitting an intraday low of ₹130.65 and a high of ₹136.85.
According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, in the near term, SJVN’s stock prices have broken below key support levels, reflecting weakness in the broader market. Bhosale suggests that this weakness may persist, potentially pulling prices towards the range of 115–110. However, considering the broader uptrend, any such dip could present a buying opportunity, with immediate resistance seen at 155–170.
Financial Performance
In terms of Q4 results, SJVN reported a more than two-fold increase in consolidated profit to ₹61.08 crore, driven by exceptional gains. However, total income dropped to ₹573.23 crore from ₹582.78 crore in the same period last year. For the fiscal year 2023–24, SJVN’s consolidated net profit increased to ₹911.44 crore, while total income decreased to ₹2,876.96 crore compared to the previous year.
The company’s board approved a final dividend of ₹0.65 per equity share for FY24, in addition to an interim dividend of ₹1.15 per equity share announced earlier in February 2024. Furthermore, the board approved a joint venture agreement with Indian Oil Corporation Ltd to develop new technology-based and green renewable projects.
According to Elara Capital, SJVN has won five solar projects totaling 2,252 MW in Q4, with several renewable energy projects under development. The brokerage expects the installation of 2,048 MW of RE projects in FY25 and 4,777 MW in FY26. However, commissioning for some projects has been delayed, impacting earnings estimates. Elara Capital maintains a target price of ₹134, based on 2x P/B regulated equity.
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