JP Power shares climb 5% post Q3 results, business updates; stock up for 4th day

Shares of Jaiprakash Power Ventures Ltd (JP Power) climbed 5 per cent in Tuesday's trade after the company reported a net profit of Rs 172.85 crore for the December quarter against a profit of Rs 68.66 crore in the September and a loss of Rs 217.97 crore in the corresponding quarter last year. The JP Power stock, which climbed 5 per cent on Monday, climbed another 5 per cent on Tuesday. It was locked at its upper circuit limit of Rs 17.77.  This was the fourth day of gains for the stock.

JP Power's revenue for the quarter climbed 82.36 per cent to Rs 2,190 crore against Rs 1,201.05 crore YoY. Power segment revenue for the quarter came at Rs 1,530.53 crore, coal segment at Rs 235.37 crore and sands mining at Rs 659.87 crore.

Uncertainty on the going concern (subsidiaries)

Independent auditor LODHA & CO LLP, meanwhile, cited uncertainty over two of JP Power's subsidiaries. Jaypee Arunachal Power Limited (JAPL), where the holding company has investments of Rs 228.72 crore, is in process of data/information submission to the nodal agency regarding handing over of the project to the designated agency i.e. NHPC where Government of India has proposed JAPL's project to be implemented by the central PSU (NHPC/NEEPCO).

Accordingly, no provision has been considered necessary for capital work in progress and advance given to government of Arunachal Pradesh and JAPL is dependent on its holding company for meeting its day-to-day obligations, JP Power said.

“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the JAPL's ability to continue as a going concern. However, the financial statements of the JAPL have been prepared by the management on a going concern basis,” it said.

Sangam Power Generation Company Limited, where JP Power had investments of Rs 552.12 crore, is having accumulated losses and its net worth has been significantly eroded as on 31 December 2023 and its claim against UPPCL is pending before the Supreme Court.

"These conditions indicates the existence of a material uncertainty that may cast significant doubt about the SPGCL's ability to continue as a going concern. However, the financial statements have been prepared on going concern basis (this is to be read with note no. 6 of the accompanying financial results)."

JP Power business updates

In the case of Vishnuprayag Hydro Electric Plant (VHEP), JP Power said the water availability in the first half of the financial year is normally higher compared with the second half of the financial year. As such, the power generation in the first two quarters lies 70-75 per cent of the annual power generation, while balance 30-25 per cent is generated in the last two quarters.

JP Power said it had given the corporate guarantee (CG) to State Bank of India (SBI) of $150 million against loans granted by SBI to Jaiprakash Associates Limited (JAL) for which fair valuation as of December 31, 2023 has not been done, as per the applicable Ind-AS.

In the earlier years, the company had accounted for impact of the Framework Agreement with its lenders for debt restructuring. The company initiated process for the release of the guarantee provided to SBI and is also in process of discussions with SBI.

"In the opinion of the management there will be no material impact on these financial results, of the fair valuation of the above-mentioned guarantee hence not been considered necessary by the management to be provided for. On this Auditors have drawn attention in their report on financial results," it said.

Also read: Stocks to watch out for today: Adani Total Gas, Newgen Software, YES Bank, Vodafone Idea and more