SJVN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Analysis

Profitability

ROE: 6.86% and ROCE: 8.36% — modest, indicating average capital efficiency for a public sector utility.

EPS: ₹2.29 — relatively low, reflecting limited earnings growth.

PAT Qtr: ₹259 Cr vs ₹30.7 Cr — strong sequential rebound, but YoY profit variation is negative (−21%), suggesting inconsistency.

Balance Sheet & Cash Flow

Debt-to-equity: 0.74 — moderate leverage, acceptable for infrastructure-heavy operations.

Dividend Yield: 1.55% — decent for income-focused investors.

Cash flows are stable, backed by regulated returns and long-term power purchase agreements.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 40.9 Overvalued vs industry PE of 31.2

P/B Ratio ~2.59 Reasonable given asset-heavy model

PEG Ratio −47.1 Not meaningful — likely due to earnings volatility

Intrinsic Value ₹85–₹90 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: SJVN Ltd is a public sector enterprise engaged in hydro, solar, and wind power generation, with a growing footprint in renewable energy.

Strengths

Government backing and strategic role in India’s clean energy transition.

Diversified portfolio across hydro, solar, and wind.

Long-term PPAs ensure revenue visibility.

Challenges

Weak return metrics and inconsistent profitability.

High valuation multiples not backed by robust earnings growth.

Mixed institutional sentiment — FII marginally up, DII slightly down.

According to Moneymint Idea, SJVN’s share price target for 2025 ranges from ₹80 to ₹120, with long-term projections reaching ₹350 by 2030, driven by renewable expansion and strategic diversification

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📈 Technical & Sentiment Overview

RSI: 47.6 — neutral zone, no strong momentum.

MACD: −0.49 — bearish crossover, short-term weakness.

DMA 50 & 200: Price below both — confirms downtrend.

Volume: Slightly below average — cooling investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹85–₹90 — near intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors seeking exposure to India’s renewable infrastructure.

Price targets for FY27 range from ₹120 to ₹170; long-term targets for FY30 range from ₹210 to ₹350

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Monitor execution of solar and wind projects, regulatory developments, and capex plans.

SJVN is a defensive utility play with strategic relevance and long-term potential, but current valuations and earnings softness suggest a staggered accumulation approach. If you're building a portfolio focused on clean energy and public sector resilience, this one deserves a watchlist spot.

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