Rs 49 to Rs 301: This power stock turned into a multibagger in three years but analysts see more upside!

Shares of JSW Energy Ltd are trading at a seven-month high. The multibagger power stock crossed the Rs 300 mark for the first time in seven months in the previous session. The energy stock last touched the Rs 300 mark on December 9, 2022 when it opened at Rs 301.55 on BSE.   

JSW Energy stock has turned multibagger in the last three years, delivering 515% returns during the period. The stock of the power producing firm, which closed at Rs 49 on July 3, 2020 ended at Rs 301.40 in the previous session (July 5, 2023), delivering 515.10% returns during the period. In comparison, Sensex has risen 81.69% in three years.    

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher is bullish on the outlook of the stock.  

 “The stock has witnessed a decent rise from Rs 260 zone and moving past the significant 200 period MA has further strengthened the trend to anticipate for further rise in the coming days with near term target expected at around Rs 330 zone. With the near-term support maintained near Rs 295 levels, the overall trend is maintained positive and investors can carry on with their position for further gains,” said Parekh 

JSW Energy stock closed 2.52% higher at Rs 301.40 on Wednesday against the previous close of Rs 294 on BSE. The stock zoomed rose over 4.5% to an intraday high of Rs 309.80.   

The energy stock has gained 49 per cent in a year and risen 2.66 per cent in 2023. In a month, JSW Energy stock has climbed 21 per cent.

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  Total 3.35 lakh shares of the firm changed hands amounting to a turnover of Rs 10.21 crore on BSE. Market cap of the firm rose to Rs 49,570 crore in the previous session.   

In terms of technicals, the relative strength index (RSI) of JSW Energy stands at 66.9, signaling it's trading neither in the overbought zone nor in the oversold zone. JSW Energy stock has a one-year beta of 1.6, indicating very high volatility during the period. JSW Energy shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.   

Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One Ltd said, “JSW Energy has seen an upsurge of over 25 percent in the current financial year and has decisively rebounded from the ongoing corrective phase on the broader time frame. At present, the counter is hovering above its major EMAs on the daily chart and has lately gained traction in trading volumes, adding to a bullish quotient. As far as levels are concerned, the 200 SMA placed around the Rs 270-275 zone is likely to act as strong support. On the higher end, a substantial hurdle of a sloping trend line lies around Rs 320-330 odd levels in the comparable period.” 

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Gaurav Bissa, VP, InCred Equities said, “JSW energy was seen trading in a 6-month consolidation phase. However, during this time it witnessed strong volumes on a few occasions suggesting renewed buying interest by the market participants. The stock recently witnessed a breakout from ascending triangle pattern on the daily charts which catapulted the stock above 300 levels. The breakout happened on the back of strong volumes which continued being above average post the breakout as well implying strong accumulation in it. The stock is trading above its previous swing high resistance of Rs 290-295 with fresh breakout seen in RSI on the daily charts. It is expected to attempt Rs 325 levels in the coming weeks."  

Meanwhile, Cholamandalam Securities has assigned a target of Rs 430 for the energy major.  

“Valuing the company at 10% discount to mean PER multiple (19x) on FY26e (EPS), per share target price comes at Rs 327. Based on DCF per share value comes to Rs 529. For the purpose of valuation, we have taken average of PER and DCF based per share value, to arrive at per share target price of Rs 430,” said the brokerage.  

The energy stock hit a 52-week high of Rs 369 on September 5, 2022 and a 52-week low of Rs 198.05 on July 6, 2022.     

Net profit in the fourth quarter of last fiscal fell 68% on lower margin and higher operational cost. Q4 profit came in at Rs 282.03 crore against Rs 877 crore in the corresponding quarter a year ago.  

For FY23, net profit slipped 15% to Rs 1480 crore. Revenue from operations climbed 9% on higher sales to Rs 2,669.9 crore. FY23 revenue rose 26% to Rs 10,331 crore.  

The company's board recommended a dividend of Rs 2 per equity share and also approved the re-appointment and remuneration of Sajjan Jindal as the chairman and managing director of the company for a period of five years with effect from 1 January, 2024, subject to the approval of the members of the company.  

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