SJVN Share Price Drops Despite 255% Profit Growth — Devil In The Details

Shares of SJVN were tumbling in early trade on Thursday after the state-run hydropower company posted weak results for year.

What Happened: The company reported a net profit of ₹61.1 crore for the January-March period, a significant increase from the ₹17.2 crore profit reported during the same period last year. While this was a growth of over 255%, the sharp rise in profit is attributed to a tax credit of ₹16 crore in the current quarter, compared to a nearly ₹40 crore tax expense in the previous year.

However, SJVN’s revenue for the period fell by 4.1% to ₹482.9 crore, down from ₹503.8 crore last year. EBITDA also declined, dropping 22.1% year-on-year to ₹239.7 crore.

Consequently, the EBITDA margin narrowed significantly, falling nearly 1,200 basis points to 49.6% from 61.3% in the previous year. This marks the first time in a year that SJVN’s margin has slipped below the 50% mark.

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One Bright Spot: Despite the overall revenue decline, renewable energy sales contributed ₹106.8 crore during FY2024, compared with ₹68 crore in the same quarter last year, showcasing growth in this segment.

In addition to its financial results, SJVN declared a dividend of ₹0.65 per equity share, over and above an interim dividend of ₹1.15 per share announced earlier.

SJVN has also announced the formation of a joint venture (JV) with Indian Oil Corporation to develop renewable energy projects and other technology-based initiatives. This JV, pending approval from the Ministry of Power, NITI Aayog, and the Department of Investment and Public Asset Management, will see both companies holding a 50% stake each with a total authorised capital of ₹250 crore.

Price Action: Shares of SJVN fell 3.44% to ₹134.90 near the start of trade on Thursday.

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