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JSW Energy’s Q1 Profit Falls 40% On Muted Power Generation

JSW Energy’s Q1 net profit fell 40 percent year-on-year to Rs 217 crore.

JSW Energy plant used for power generation. (Picture: Taken from JSW Energy’s website)
JSW Energy plant used for power generation. (Picture: Taken from JSW Energy’s website)

JSW Energy Ltd.’s quarterly profit fell missing estimates as net power generation of the company continued to decline.

Net profit for the quarter ended June fell 40 percent over the year-ago period to Rs 217 crore, the company said in an exchange filing. That's lower than Rs 234 crore consensus estimate of analysts tracked by Bloomberg.

Revenue fell 8.9 percent year-on-year to Rs 2,232 crore, due to lower generation from coal-fired plants and subdued merchant realisations. Two out of four plants of JSW Energy achieved less than deemed plant-load factor for the quarter.

Fuel costs increased 8 percent to Rs 1,120 crore due to rising international coal prices.

Earnings before interest, tax, depreciation and amortisation receded 22.2 percent to Rs 869 crore, primarily due to a fall in revenue. EBITDA margin contracted 670 basis points to 39 percent.

Shares of the company were down 0.5 percent compared to an over 1 percent decline in the benchmark Nifty 50 Index at 3:18 p.m.

Electric Vehicle Launch

JSW Energy will manufacture electric vehicles by 2020, in sync with the government’s vision to make all cars electric by 2032.

JSW Energy’s board, led by steel tycoon Sajjan Jindal, approved plans to manufacture electric vehicles, associated energy storage systems and charging infrastructure, Chief Executive Officer and Managing Director Prashant Jain told BloombergQuint.

We aspire to launch our first car in 2020, and will be beginning with nearly 50-60 percent localisation.
Prashant Jain, CEO and MD, JSW Energy 

He added that the electric vehicle space is at an inflectional point and the company’s products will be designed exclusively for Indian consumers with the ‘Make in India and Make for India’ vision. The company will look at importing lithium iron cells for batteries.

JSW Energy will invest up to Rs 4,000 crore into the electric car project through a mixture of debt and equity, said Jain. 

The company will raise around Rs 1,500 crore via equity, the CEO added.

The JSW Group subsidiary is also looking at various states across the country for setting up manufacturing facilities.