E-PaperMultibagger PSU stock SJVN shares break below key support levels. Opportunity to buy?
- SJVN share price surged by 260% in a year, Elara Capital maintains 'reduce' recommendation due to high valuation. Stock opened at ₹135.75, trading in the red. Analyst predicts weakness in near term, with potential dip to 115–110 before rebounding.
SJVN share price soared by nearly 260% in just one year, providing investors with multibagger gains. Due to the recent increase in the stock price of the State-owned corporation, domestic brokerage Elara Capital maintained a "reduce" recommendation on SJVN in its latest report, which followed the company's Q4 results. The brokerage firm believes that valuation has already accounted for potential near-term growth. Project execution is also the most important monitorable, even with a robust project pipeline. Elara Capital believes that the stock might decline by 4%.
SJVN share price today opened at ₹135.75 apiece on BSE, the stock was trading in the red on Friday's session. SJVN share price touched an intraday low of ₹130.65 and an intraday high at 136.85 level.
According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, in the near term, stock prices have broken below key support. The breakdown is in line with weakness in the broader market, going ahead, this weakness may persist, pulling prices towards 115–110; however, considering the broader uptrend, any such dip would be a buying opportunity. 155–170 is immediate resistance.
Q4 Results
SJVN recorded a more than two-fold increase in consolidated profit to ₹61.08 crore for the March quarter (Q4FY24), attributed to exceptional gains. In the same period last year, the company earned a consolidated net profit of ₹17.21 crore, according to a BSE filing.
The company's financial results for the quarter (Q4FY24) showed exceptional gains of ₹103.84 crore. But compared to the same quarter last year, the company's total income dropped to ₹573.23 crore from ₹582.78 crore.
In 2023–24, the company's consolidated net profit increased to ₹911.44 crore from ₹1,359.30 crore the previous year. Additionally, the total income for the fiscal year dropped from ₹3,282.50 crore in 2022–2023 to ₹2,876.96 crore.
A final dividend of ₹0.65 per equity share for the fiscal year 2023–24 has been approved by the board of directors, awaiting shareholder approval at the next annual general meeting.
The interim dividend of ₹1.15 per equity share for FY24, announced in February 2024, is in addition to the final dividend, which will be paid within the statutory time frame.
The SJVN board also approved the signing of a 50:50 joint venture agreement with Indian Oil Corporation Ltd to establish a joint venture firm that would develop new technology-based projects as well as 24/7 green and renewable projects.
Here's what the brokerage says
According to brokerage Elara Capital, SJVN won five solar projects in Q4 totalling 2,252 MW in an open competitive bidding procedure. There are now twelve solar projects (2,048MW), four hydro projects (1,558MW), and one thermal project (1,320MW) in construction. It is developing 7.2 GW worth of renewable energy (RE) projects.
In FY25, SJVN may install 2,048 MW of RE projects, and in FY26, 4,777 MW. The 1,320MW Buxar capacity's commissioning has been postponed because to unrest in the area. It is anticipated that unit one will be put into service in Q3FY25, and unit two by Q4FY25. The Arun-3 project's commissioning was also postponed until Q3FY26.
“We change. FY25E-26E earnings estimate and maintain our target price at ₹134, on 2x P/B regulated equity,” the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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