SMC Global Securities Targets ₹129 for SJVN Ltd, Anticipating Over 12% Gains Amid Strong Dividend Yield and Growth Plans

SMC Global Securities has identified SJVN Ltd as a top trading pick for the week of November 4 to 8, 2024, with a target price set at ₹129, suggesting a potential upside of over 12% from its current trading price of ₹115. SJVN is recognized as one of the leading dividend-paying public sector undertakings (PSUs) in the energy sector, having distributed ₹1.8 per share over the last 12 months, translating to an impressive 18% yield.

Key Highlights of SJVN:

• Market Performance: SJVN’s stock gained over 1.5% during the recent Muhurat Trading session, with a market capitalization of approximately ₹45,192.64 crore. The stock has seen a 52-week range of ₹71.44 to ₹170.45.
• Valuation Metrics: The company’s price-to-earnings (P/E) ratio stands at 46.81, while the return on equity (ROE) is reported at 6.88%.
• Q1 FY2025 Financial Results: SJVN posted a strong performance in its first quarter, with a 29% increase in revenue and a 31% rise in net income, reflecting robust operational capabilities.
• Growth Aspirations: The company aims to achieve a total operational capacity of 25,000 MW by 2030 and 50,000 MW by 2040. In line with these goals, SJVN has already initiated tenders for 4.8 GW out of a targeted 10.8 GW capacity expansion for FY2024 and FY2025.
• Strategic Initiatives: Recently, SJVN has signed a Memoranda of Understanding (MoUs) with the government of Maharashtra to develop several projects, including five Pumped Storage Projects with a total capacity of 8,100 MW and a 505 MW Floating Solar Project at Lower Wardha Dam. The estimated investment for these projects is around ₹48,000 crores.

About SJVN:

SJVN Limited is a Navratna company under the administrative control of the Ministry of Power, Government of India. Established in 1988 as a joint venture between the Government of India and the Government of Himachal Pradesh, SJVN has evolved into a publicly listed company with a shareholding pattern that includes 55% from the Government of India, 26.85% from the Government of Himachal Pradesh, and 18.15% held by the public.

Currently, SJVN operates 2,467 MW of power projects and is engaged in numerous initiatives across various states in India as well as in neighboring Nepal. The company has a paid-up capital of ₹3,929.80 crore and aims to expand its portfolio in the coming years significantly.

Given these factors, SMC Global Securities believes SJVN presents a compelling investment opportunity in the energy sector, supported by strong growth prospects and a commitment to shareholder returns.

Disclaimer: This communication is for informational purposes only and should not be considered as financial advice. Past performance is not indicative of future results. Please conduct your own research or consult with a financial advisor before making investment decisions.