Stock Market Updates : On August 21, the share price of SJVN fell significantly to an intraday low of ₹136.51 on the National Stock Exchange (NSE), down by 1.46% from its previous close. This decline came after Goldman Sachs reaffirmed its ‘Sell’ recommendation on the state-owned hydropower company.
Goldman Sachs has now set a new target price of ₹85 per share, an increase from their earlier recommendation of ₹75 per share. This revised target indicates a potential downside of 38% from the current levels during Wednesday’s trading session. While Goldman Sachs maintains a “sell” rating, it’s worth noting that out of the analysts covering SJVN, two have given it a “sell” rating, three recommend buying, and one suggests holding the stock.
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Stock Market Updates : Should You Buy or Sell SJVN Stock?
Goldman Sachs highlighted in their report that the commissioning of SJVN’s 1,320 MW Thermal Power Plant in Buxar has encountered further delays. Unit-1 is now expected to be operational by the end of the 2025 financial year, with Unit-2 following in the 2026 financial year.
Despite these setbacks, the global brokerage pointed out several positive factors that could benefit SJVN in the future. These include new business opportunities, better-than-expected progress in renewable energy projects, a promising acceleration in the renewable energy sector, and a potential significant decrease in debt costs.
Additionally, SJVN plans to raise ₹2,000 crore through the SJVN Green Energy Initial Public Offering (IPO).
The stock has been on a downward trend for the past three days, losing 4.3% during this period and currently trading below its 5- and 50-day moving averages. In July, SJVN received a Letter of Intent (LoI) from the Government of Mizoram for the allocation of the Darzo Lui Pumped Storage Project, which is expected to cost ₹13,947.50 crore, including interest during construction (IDC) and financing costs, as per April 2023 prices.
Despite the recent decline in its share price, SJVN reported strong financial results for the first quarter of FY25. The company’s consolidated net profit increased by 31% year-on-year to ₹357 crore, driven by higher income. Their total income grew by 29% year-on-year to ₹958.47 crore.
FAQs
Why did SJVN’s share price drop on August 21?
The share price fell due to Goldman Sachs reaffirming its ‘Sell’ recommendation on the stock and setting a new target price significantly below the current levels.
What is Goldman Sachs’ new target price for SJVN?
Goldman Sachs set a new target price of ₹85 per share, up from their previous recommendation of ₹75 per share.
What factors could positively impact SJVN’s future performance?
Positive factors include new business opportunities, better-than-expected execution in renewable energy projects, acceleration in the renewable energy sector, and a potential decrease in debt costs.
What is the status of SJVN’s Thermal Power Plant in Buxar?
The commissioning of the 1,320 MW Thermal Power Plant in Buxar has been delayed, with Unit-1 expected to be operational by the end of FY25 and Unit-2 by FY26.
How has SJVN’s stock performed recently?
The stock has been declining for the past three days, dropping by 4.3% during this period and is trading below the 5- and 50-day moving averages.
What financial results did SJVN report for Q1FY25?
SJVN reported a 31% year-on-year increase in consolidated net profit, reaching ₹357 crore, with total income growing by 29% year-on-year to ₹958.47 crore.
What is the Darzo Lui Pumped Storage Project?
The Darzo Lui Pumped Storage Project is a hydroelectric project allocated to SJVN by the Government of Mizoram. It is expected to cost ₹13,947.50 crore.
What is the SJVN Green Energy IPO?
SJVN plans to raise ₹2,000 crore through the SJVN Green Energy Initial Public Offering (IPO), which will support the company’s renewable energy projects.
What do other analysts recommend regarding SJVN stock?
Out of the analysts covering SJVN, two recommend selling, three recommend buying, and one suggests holding the stock.
Is SJVN a good investment right now?
This depends on individual investment goals and risk tolerance. While Goldman Sachs has a bearish outlook, other analysts see potential upside, particularly in the renewable energy sector.