SJVN’s share price fell sharply to an intraday low of ₹136.51 on the National Stock Exchange (NSE) on August 21, losing 1.46 percent from the previous close after Goldman Sachs reiterated its sell rating on the state-owned hydropower company.
The analysts of the global brokerage house set a new price target of ₹85 per share, above their previous recommendation of ₹75 per share.
The adjusted price target indicates a potential downside of 38 percent from current levels in Wednesday’s trading session.
Goldman Sachs is one of the two analysts covering SJVN with a “sell” rating on the stock. Three other analysts, however, have given a “buy” recommendation and one advises a “hold”.
Should you buy or sell?
According to the brokerage report, there have been further delays in the commissioning of SJVN’s 1,320 MW thermal power plant at Buxar. Unit 1 is now expected to be operational by the end of FY2025, while Unit 2 is expected to be commissioned in FY2026.
The global brokerage firm noted that SJVN stands to benefit from several positive factors going forward, including new opportunities, better-than-expected achievements and implementations in renewable energy projects, encouraging acceleration in the renewable energy sector and a significant reduction in borrowing costs.
The company plans to ₹2,000 crore through the initial public offering (IPO) of SJVN Green Energy.
The stock has been on a downward trend for three days, losing 4.3 percent during this period and is trading below the 5-50 day moving average.
In July, the company announced that it had received a Letter of Intent (LoI) from the Government of Mizoram for the award of the Darzo Lui pumped storage project. The project is expected to ₹13,947.50 crore, including interest during construction (IDC) and finance costs based on April 2023 prices, according to a filing with the exchange.
The hydropower company recorded a 31 percent increase in consolidated profit compared to the previous year and reached ₹357 crore in Q1FY25, driven by higher revenues. Total revenues increased by 29 percent year-on-year to ₹958.47 Crores.
