We had recommended SJVN Ltd in issue no. 11 dated May 1- May 14, 2017 under “Choice Scrip” section when the scrip was trading at ₹35.05. Our recommendation was backed by company’s attractive valuation and FY18 execution plans.
SJVN Limited, a Mini Ratna company, is a joint venture of the Government of India and the Government of Himachal Pradesh. SJVN is primarily engaged in the business of generation and transmission of power. The company operates in the thermal power segment. It is implementing projects in Himachal Pradesh, Uttarakhand, Bihar, Gujarat, Rajasthan and Arunanchal Pradesh in India, besides neighbouring countries like Nepal and Bhutan. The installed capacity of the company is approximately 1,959.6 MW.
On the financial front, the company’s total income increased 7.2 per cent to ₹3,119.90 crore in FY17 compared to the previous fiscal. Moreover, the company’s PBDT rose 7.20 per cent to ₹2,553.91 crore in FY17 from ₹2,382.28 crore in FY16. The company’s net profit rose from ₹1,408.48 crore in FY16 to ₹1,544.14 crore in FY17, registering 9.63 per cent increase.
However, on a quarterly basis, SJVN Ltd posted 5.26 per cent decrease in its revenue to ₹701.78 crore in Q1FY18 from ₹740.76 crore in Q1FY17. The company’s PBDT decreased 10.39 per cent to ₹679.32 crore in the first quarter of FY18 on a yearly basis.
The company’s net profit also declined 5.86 per cent to ₹451.37 crore for the corresponding period. We do not see much improvement in the performance of the company in the coming quarter. So we recommend our reader investors to EXIT the scrip. (Closing price as on Oct 05, 2017)