SJVN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 2.7

📊 Financials: SJVN has reported quarterly PAT of ₹372 Cr vs ₹259 Cr previously, though profit variation (-21.3%) indicates volatility. EPS at ₹2.04 is modest relative to price. ROE at 6.86% and ROCE at 8.36% reflect weak capital efficiency. Debt-to-equity ratio of 0.70 shows moderate leverage, manageable but adds risk. Dividend yield of 2.02% provides some income support for shareholders.

💹 Valuation: Current P/E of 35.8 is higher than industry PE of 26.7, suggesting premium valuation. Book value ₹37.6 vs CMP ₹72.9 implies a fair P/B multiple (~1.94x). PEG ratio of -41.2 highlights negative earnings growth relative to valuation. Intrinsic value appears lower than CMP, signaling caution despite dividend support.

⚡ Business Model: SJVN operates in power generation, primarily hydro and renewable energy projects. Competitive advantage lies in government backing, established infrastructure, and renewable expansion. Risks include regulatory challenges, project delays, and earnings volatility tied to seasonal demand.

📈 Entry Zone: Technically, support lies near ₹70–₹72. CMP at ₹72.9 is below DMA 50 (₹80.7) and DMA 200 (₹91.8), indicating weakness. RSI at 22.5 suggests oversold territory, but entry is advisable only closer to ₹70 for margin of safety.

📌 Long-term Holding: Government support and renewable energy focus provide stability, but weak return ratios and stretched valuations limit attractiveness. Long-term holding requires caution unless profitability improves and valuations normalize.

Positive

• 📈 Dividend yield of 2.02% provides income support.
• ⚡ Government backing ensures stability in power generation projects.
• 📊 EPS of ₹2.04 supports earnings visibility.
• 📉 RSI at 22.5 indicates oversold territory, potential for technical rebound.

Limitation

• ⚠️ Weak ROE (6.86%) and ROCE (8.36%) reflect poor capital efficiency.
• 📉 PEG ratio of -41.2 highlights negative earnings growth.
• 💸 CMP below DMA 50 and DMA 200 indicates technical weakness.
• 📉 Quarterly profit variation (-21.3%) signals earnings volatility.

Company Negative News

• 📉 Earnings volatility and weak return ratios undermine investor confidence.

Company Positive News

• 📈 Increase in FII holdings (+0.03%) and DII holdings (+0.22%) shows marginal institutional support.

Industry

• ⚡ Power sector trades at industry PE of 26.7, highlighting SJVN’s premium valuation.
• 📊 Industry growth supported by renewable energy expansion and government infrastructure push.

Conclusion

⚖️ SJVN is fundamentally weak with poor return ratios and stretched valuations despite government support and dividend yield. Entry is advisable only near ₹70 support zones for speculative positions. Long-term holding requires caution unless profitability stabilizes and earnings growth improves.

Would you like me to extend this with a peer benchmarking overlay against other power PSUs like NHPC and NTPC to highlight comparative valuation and efficiency?