Shares of JSW Energy surged more than 13 per cent on Thursday after its arm, JSW Noo Energy, signed an agreement with the Maharashtra government to set up a 960 megawatt (MW) hydro pump storage project in the state’s Raigarh district, without disclosing any financial details.
During the day, the stock rallied as much as 13.96 per cent to trade at 334.20 on NSE. On BSE, the shares hit an intraday high of Rs 334, before settling slightly lower at Rs 330.65.
JSW Energy traded a little over 19 per cent lower from its 52-week high of Rs 408.70 today.
“The stock is in action due to news that JSW Neo Energy, a wholly owned subsidiary of JSW Energy, has entered into a Memorandum of Understanding (MoU) with the Maharashtra government for setting up a 960 MW capacity of Hydro Pumped Storage Project,” said Prashanth Tapse Mehta, Research Analyst, senior VP (Research), Mehta Equities Ltd.
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The company’s “green growth vehicle” — JSW Neo Energy — has been expeditiously securing key resources for hydro pump storage projects in various states with a targeted capacity up to 10 GW.
Hydro pumped storage is a technology that aims to provide ample peaking power reserves, reliable grid operation, energy balancing and storage capacity.
Technically, the stock can rally up to Rs 345-350 levels in short term, he added.
“JSW Energy revenue is expected to be higher by 4.4 per cent year-on-year (YoY) to Rs 2,170 crore in Q2 FY23(E), due to increased generation, but we expect a fall merchant sales volume for the quarter on reduced prices. Adjusted profit is likely to rise 6.4 per cent YoY,” brokerage and research firm Elara Securities stated.
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The brokerage and research firm retained its positive outlook on the power sector. “We retain our positive stance on the sector, as power firms under our coverage universe are likely to deliver better performance in Q2 FY23. As the Monsoon recedes and the festival season unfurls, power demand growth may normalize in the near term to reach high single-digits on-demand surge from residential and agriculture segments,” it added.
Last week, the fair-trade regulator — Competition Commission of India (CCI) — approved the acquisition of 18 subsidiaries of Mytrah Energy by JSW Neo Energy.