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Muted quarter

SJVN (SJVN IN) reported 4% YoY revenue growth to ~INR 5.0bn in Q4FY25, with a flat EBITDA at INR 2.4bn. Earnings were hit by a 51% drop in Other income to INR 444mn, due to lower fixed deposit balances amid high capex. Depreciation rose 13% YoY to INR 2.7bn, including an impairment of ~INR 1.4bn for 34 green projects, while interest cost increased 32% YoY to INR 1.6bn, due to ongoing project financing. Power generation rose 25% YoY in FY25 to 10,647MU, driven by higher output from Nathpa Jhakri and Rampur. Installed capacity reached 2,786MW with 190MW solar additions in FY25, and SJVN plans to add 4,995MW in FY26 (1.2GW thermal and 3.7GW renewables). It incurred INR 78bn in capex in FY25, targeting INR 83bn for FY26 and INR 120bn for FY27. The company earned ~INR 1.2bn in incentives in Q4 and is on track to meet 25GW capacity target by FY30 and 50GW by FY40. We retain our Buy rating with a target price of INR 131.

Lower Other income impacts earnings: SJVN reported revenue growth of 4% YoY to ~INR 5.0bn. Employee cost decreased 26% YoY to INR 731mn. EBITDA was stagnant at INR 2.4bn. Depreciation increased 13% YoY to INR 2.7bn. Interest expenses rose 32% YoY to INR 1.6bn. Interest and depreciation cost also went up, due to ongoing capex and project financing. Depreciation cost included ~INR 1.4bn as a impairment amount for 34 green projects. Other income declined 51% YoY to INR 444mn, due to lower fixed deposit balance amid higher capex.

Generation increases 25% YoY in FY25: Power generation increased 25% to 10,647MU in FY25. Generation for Nathpa Jhakri stood at 7,421MU in FY25 vs 6,312MU in the past year. Generation from Rampur stood at 2,074MU in FY25.

Around 5GW of capacity to be added in FY26: SJVN installed capacity currently stands at 2,786MW. It has added 190MW of solar capacity in FY25. It targets to add 4,995MW of capacity in FY26, comprising 1.3GW of thermal and 3.7GW of renewable capacity. It has incurred a capex of INR 78bn in FY25 and has set a target of INR 83bn for FY26 and INR 120bn for FY27. It has received an incentive income of ~INR 1.2bn in Q4FY25, comprising INR 350mn of capacity-related incentive and INR 760mn of secondary energy incentive. It targets 25GW of installed capacity by FY30 and 50GW by FY40.

Retain Buy with a TP of INR 131: Management has an ambitious plan on installed capacity. It plans to achieve 25GW installed capacity in the near term. We remain optimistic about SJVN's long-term growth prospects, supported by robust sectoral fundamentals. The company continues to prioritize expanding installed capacity across a balanced portfolio of hydro, RE and thermal power projects. We introduce FY28E earnings. We retain Buy with a TP of INR 131 on 2.5x FY27E P/B regulated equity.

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SEBI Registration number is INH000000933