SJVN Ltd recently made headlines with its fourth-quarter and full fiscal year earnings report for FY24, alongside an announcement of a final dividend. The firm’s performance showed a significant rise in net profit but faced declines in revenue and EBITDA, leading to mixed reactions in the market.
For the quarter ended March 2024, SJVN reported a substantial 254% increase in net profit, reaching Rs 61.1 crore compared to Rs 17.2 crore in the same quarter the previous year. This impressive profit jump marks a significant achievement for the company.
The revenue figures tell a different story. Revenue for the quarter fell by 4.1%, down to Rs 482.9 crore from Rs 503.8 crore in the fourth quarter of FY23. This decline highlights some underlying challenges the company faces in maintaining its top-line growth amidst a competitive market and fluctuating demand.
The company’s EBITDA, a critical measure of operational performance, also saw a decline. EBITDA slipped by 22.4%, dropping to Rs 239.7 crore in Q4 FY24 from Rs 309.9 crore in the corresponding period of the previous fiscal year. This decrease suggests that increased operational costs or other factors may be impacting the company’s core earnings, despite the substantial rise in net profit.
For the entire fiscal year 2024, SJVN reported a net profit of Rs 911.44 crore, a noticeable drop from Rs 1359.30 crore in FY23. Similarly, the annual revenue saw a decline, falling to Rs 2579.37 crore in FY24 from Rs 2938.35 crore in the previous fiscal year. These figures indicate a challenging year for SJVN, with significant pressure on both profitability and revenue streams.
Despite these mixed financial results, SJVN’s board recommended a final dividend of Rs 0.65 per equity share for FY24, pending approval from shareholders at the upcoming Annual General Meeting. This final dividend is in addition to the interim dividend of Rs 1.15 per equity share declared in February 2024. The total dividend payout reflects the company’s commitment to returning value to its shareholders even amidst a challenging financial landscape.
In addition to the earnings report, SJVN announced a strategic move to form a joint venture with Indian Oil Corporation. This joint venture aims to develop renewable projects and other new technology-based projects, aligning with the growing emphasis on sustainable energy solutions. Both SJVN and Indian Oil will hold equal stakes of 50% each in the proposed joint venture, which will have an authorized capital of Rs 250 crore.
However, the formation of this joint venture is subject to approval from the Ministry of Power, NITI Aayog, and the Department of Investment and Public Asset Management.
Following the earnings announcement, which was made after market hours on Wednesday, SJVN’s stock ended the trading day on a flat note, closing at Rs 139.65. The company’s market capitalization stood at Rs 54,879 crore. The stock’s flat performance suggests that the market may have already anticipated the earnings outcome, or it could reflect cautious sentiment given the declines in revenue and EBITDA despite the significant rise in net profit.
