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JSWENERGY - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.3
JSW Energy shows long-term potential in renewables, but weak return metrics and high valuation limit near-term upside.
📊 Financial Overview
- Profitability: PAT rose from ₹162 Cr to ₹190 Cr QoQ, but YoY profit dropped 33.4%, indicating volatility.
- Return Metrics: ROE at 6.24% and ROCE at 5.82% are below industry norms, reflecting low capital efficiency.
- Valuation: P/E of 89.2 is nearly 3× the industry average (30.9), suggesting significant overvaluation.
- P/B Ratio: With a book value of ₹130 and price of ₹528, P/B is ~4.06, moderately high.
- PEG Ratio: 3.26 indicates poor growth-adjusted valuation.
- Debt Profile: Debt-to-equity ratio of 0.61 is manageable, showing moderate leverage.
- Momentum: RSI at 52.6 and MACD at 0.72 suggest neutral sentiment with limited upside.
🏢 Business Model & Competitive Edge
- JSW Energy operates across thermal, hydro, wind, and solar segments, offering diversified energy generation.
- Currently has 995 MW operational capacity and 2,655 MW under construction, expanding its renewable footprint.
- Venturing into energy storage and green hydrogen, aligning with future energy trends
moneymintidea.com
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💡 Entry Zone Recommendation
- Current price is slightly below DMA 50 and DMA 200, indicating consolidation.
- Suggested Entry Zone: ₹500–₹520 for accumulation on dips.
- Long-term holding viable if ROE/ROCE improve and valuation normalizes.
✅ Positive
- Quarterly PAT improved QoQ, showing operational resilience.
- Moderate debt levels support future expansion.
- Strategic focus on renewables and green hydrogen initiatives.
⚠️ Limitation
- High P/E and PEG ratios signal overvaluation.
- ROE and ROCE below industry standards.
- Decline in FII holdings (-0.24%) reflects cautious foreign sentiment.
📉 Company Negative News
- YoY profit variation of -33.4% raises concerns about earnings consistency.
- Stock has corrected ~32% from its 52-week high of ₹777.
📈 Company Positive News
- Renewable energy projects gaining traction with government support.
- QoQ PAT growth and stable dividend yield (0.37%) offer investor confidence.
🏭 Industry
- Power sector is transitioning toward renewables, with policy tailwinds and capex incentives.
- Industry P/E of 30.9 supports moderate valuation for growth-focused players.
🧾 Conclusion
- JSW Energy is a diversified power player with long-term potential in renewables.
- Entry near ₹500–₹520 is reasonable for long-term investors seeking exposure to green energy.
- Monitor ROE, ROCE, and valuation metrics for sustained performance.
Sources
moneymintidea.com
,
WalletInvestor.com
,
stockpricearchive.com
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