SJVN Limited stock may give 50% return in next two years

SJVN Limited incorporated on 24 May 1988 is a Mini Ratna CPSE under the administrative control of the Ministry of Power, Govt. of India. It is a joint venture of the Government of India and the Government of Himachal Pradesh. SJVN Ltd is listed on the Indian stock exchanges with 59.92% equity held by the Govt of India, 26.85% by the Govt of Himachal Pradesh and the balance shareholding of 13.23 % is held by the Indian public.
The company began with a single project and the country’s largest 1500 MW Nathpa Jhakri Hydro Power Station in Himachal Pradesh, it has commissioned seven projects totalling 2016.5 MW of installed capacity and 86 km 400 KV Transmission Line. SJVN is presently implementing or operating power projects in Himachal Pradesh, Uttarakhand, Bihar, Maharashtra, Uttar Pradesh, Punjab, Gujarat and Arunachal Pradesh in India besides neighbouring countries of Nepal and Bhutan.
The company posted excellent Q3FY22 financial results on all fronts whether it was hydro, solar or wind. The total income registered an increase of 14% from Rs 531 crore as of last year to Rs 607 crore. Revenue from operations rose by 11% from Rs 495 crores of last year to Rs 550 crore. Meanwhile, the profit after tax registered an increase from Rs 195 crore as of last year to Rs 232 crore. The company has revised its goal along with the futuristic strategy of the Govt of India on the renewable sector. Looking at the demand for energy in the years to come, the shared goal and vision of SJVN has created immense opportunities to double its power capacities in the next decade or so. While the company has a target of achieving 5000 MW by next year, it intends to double the target to 25000 MW by 2030 and by 50000 MW by the year 2040.
All these capacity increases would entail lot of fund requirement for SJVN, but the management has visualised and incorporated these factors in consideration in their business outlook. The company’s stock currently quoting at Rs 27 is a long term fundamental buy and can deliver a 50% price appreciation in the next two-year time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.