Shares of JSW Energy fell sharply on Monday, extending their losing run for the second straight session. The stock slumped 6.37 per cent to hit an intraday low of Rs 245.50 over its previous close of Rs 262.20 on BSE. The scrip eventually settled 5.74 per cent lower at Rs 247.15 today.
Around 93,000 shares changed hands today, which was higher than JSW Energy’s two-week average volume of 70,000 shares. Turnover on the counter stood at Rs 2.30 crore, commanding a market capitalisation (m-cap) of Rs 40,648.16 crore.
Analysts largely felt that the counter looked ‘weak’ with support seen at around Rs 245 level.
Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said, “JSW Energy has plunged nearly 17 percent in the last four trading weeks and is placed well below all its major moving averages on the daily chart, indicating inherent weakness. On technical parameters, the primary indicators are adding to the bearish tone in the counter. As far as levels are concerned, an authoritative breakdown below the Rs 242-245 zone could disrupt the technical chart, and the counter could plunge toward the Rs 220 zone. On the higher end, the bearish gap of Rs 255-262 is likely to act as the primary hurdle, breaching which some relief could be seen in the comparable period.”
AR Ramachandran from Tips2trades, “A disappointing Q3 FY23 results with increasing debt has led to a sharp fall in JSW Energy stock price. Rs 262 remains a strong resistance. Investors should buy only if the daily close is above Rs 263 for targets of Rs 276-296. Support will be at Rs 245.”
Brokerage view
Kotak Institutional Equities has given a ‘Sell’ call on the counter with a revised fair value of Rs 130. Higher tariff realizations were offset by an increase in fuel costs, even as lower merchant sales compared with the base quarter led to a 21 per cent (yoy) decline, the brokerage noted.
“The revised fair value is primarily on account of the higher value of the stake in JSW Steel, while earnings estimates have been marginally revised (+1.3 per cent for FY2023E and -1.9 per cent for FY2024E) on the basis of 9MFY23 performance,” it added.
JM Financial has assigned a ‘Hold’ call to JSW Energy with a target price of Rs 270. “Sufficient balance sheet headroom and strong cash flow generation will help achieve the targeted growth plans,” the brokerage stated.
JSW Energy reported a 45 per cent decline in its consolidated net profit to Rs 180 crore for the December 2022 quarter against Rs 324 crore posted in the same period a year ago.
The counter’s 14-day relative strength index (RSI) came at 26.22. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 58.57.
The stock traded lower than 5-day, 20-, 50-, 100- and 200-day moving averages. JSW Energy has an average target price of Rs 211, Trendlyne data showed, suggesting a potential downside of 14.52 per cent. The stock has a one-year beta of 1.41, indicating high volatility.
As of December 2022, promotors held a 74.66 per cent stake in JSW Energy.
Meanwhile, Indian equity benchmarks rose today, led by gains in technology, banks and financials.
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