Last month, JSW Energy announced that it had terminated a  ₹6500-crore deal to acquire a 1000-MW power plant in Raigarh from Jindal Steel and Power (Mint file)
Last month, JSW Energy announced that it had terminated a 6500-crore deal to acquire a 1000-MW power plant in Raigarh from Jindal Steel and Power (Mint file)

JSW Energy reports marginally higher profit in Q1

  • Net profit stood at 237.27 crore during the third quarter of 2019-20, a marginal improvement from 229.53 crore a year ago
  • The company has set up JSW Solar to participate in reverse bidding auctions of intermediaries such as Solar Energy Corporation of India and state distribution companies

Mumbai: JSW Energy, a part of the Sajjan Jindal group, reported a net profit of 237.27 crore during the third quarter of 2019-20, a marginal improvement from 229.53 crore a year ago. Earnings remained stable an a year-on-year basis as fuel and finance costs fell from the year-ago period.

The company is going to foray into the solar power sector, said Sharad Mahendra, director and chief operating officer, JSW Energy. "We are examining the environment in solar power and will consider participating in reverse bidding for setting up projects. In the first rush to set up solar plants, there was a lot of dollar-funded private equity investors participating who brought the tariffs down. We believe this has stabilized now and tariffs at 2.60-2.85 per kWh range suit a long-term player like us."

The company has abandoned its earlier plans to manufacture solar modules in India and will focus only on development, according to Mahendra.

The company has set up JSW Solar, a fully-owned subsidiary, to participate in reverse bidding auctions of intermediaries such as Solar Energy Corporation of India and state distribution companies. The company currently has set up a group captive solar capacity of 10MW at Nandyal and Salboni.

On its coal-fired plants, JSW Energy managed to increase its long-term power purchase agreement tie-up to 81.4% of its generation, while 18.6% is sold on power exchanges. As a result, plant load factors at the Vijaynagar and Ratnagiri units fell to 38.2% and 83.6% (from 55.4% and 85.5%), respectively, due to lower short-term sales. The hydroelectric plant in Himachal Pradesh achieved higher PLF of 66.3% due to better water availability in the Sutlej basin. In total, power generation fell from 6,086 units in the first quarter last financial year to 5,867 units this year. Fuel costs fell 2% year-on-year because of a moderation in the prices of imported coal, while EBITDA rose 2% this quarter to 861 crore, from 844 crore in the previous year.

Last month, JSW Energy announced that it had terminated a 6500-crore deal to acquire a 1000-MW power plant in Raigarh, Chhattisgarh, from Jindal Steel and Power, owned by Sajjan Jindal's younger brother Naveen. JSPL owes 500 crore to JSW Energy and the latter had agreed to acquire the plant instead. However, the date of acquisition (July 31,2019) has passed. JSW Energy said it was in talks with JSPL for new terms to repay the loan.

JSW Energy will submit a renewed bid for incomplete thermal plant in Odisha, owned by the Ind Bharat group. The first round saw bids from JSW and Vedanta, but both were below the company's liquidation value. Lenders have now called for second round of bids for the 700-MW project.

The company said board had approved raising 2,500 crore through issuing non-convertible debentures through private placement. The company has a net debt of 10,221 crore as of June 30.

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