Decline in costs fuel JSW Energy Q2 earnings, muted demand still a challenge
New Delhi: JSW Energy withstood demand slowdown better, reporting a 5% expansion in operating profit for the September quarter. Net profit rose 11.7% even as customers tempered electricity purchases. The performance impressed the Street, sending the stock up 5.7% in early deals on Monday.
Earnings got a boost from low fuel and finance costs and strong performance in the hydro division. Tracking the fall in imported coal prices, fuel costs declined 26%. The fall in fuel costs weighed on realization and revenues, which fell 13% from a year ago, but this was offset by a reduction in debt and an 11.7% fall in finance costs. Also, thanks to better availability of water, hydro power plants did well clocking superior utilization levels.
On the face of it, the performance looks decent, especially as it comes in the backdrop of a country-wide decline in generation in the September quarter.
