52 week flop: JSW Energy

The stock of JSW Energy has been on a steep slide in spite of adding 735 MW to take its total operational capacity to 1730 MW.

High fuel costs, depressed merchant realisations and execution delays have taken a toll on JSW Energy. The company is one of the few utilities with a high exposure to merchant tariffs and imported spot-coal prices.

Even as the company's total capacity went up by 73 per cent and generation revenues grew by 78 per cent, the net profits for the year ended March 2011 grew by a modest 12 per cent.

Profits had declined 30 per cent in the March '11 quarter compared to the same quarter in 2010.

JSW Energy's exposure to coal spot prices, which spiked on the backs of rising global demand and floods in Australia, resulted in high input costs. .Fuel costs for FY-11 grew a massive 141 per cent. The company's efforts to acquire coal mines abroad have been delayed by regulatory hurdles

Additionally, power capacity was expected to go up in excess of 3000 MW by end of March 2011.

These capacities have instead slipped into the current fiscal.

Exacerbating woes, merchant tariffs also moderated. The average merchant tariff realisation for JSW Energy was Rs 4.95 per unit in FY11 against Rs 4.97 per unit in FY10.

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