SJVN Ltd, a key player in India’s hydroelectric power sector, witnessed a sharp decline in its share price by up to 5% on May 30, 2025, following the release of its March quarter financial results. The results, announced after market hours on May 29, reflected a significant turnaround as the company reported a net loss, reversing its previous year’s profit position.

Key Financial Highlights

For the quarter ending March 2025, SJVN posted a net loss of ₹127.7 crore, compared to a net profit of ₹61 crore in the corresponding quarter of the previous year. This stark shift was primarily driven by an increase in operating and other expenses that weighed heavily on the company’s bottom line.

Despite the net loss, the company’s revenue grew by 4.5% year-on-year to ₹504.4 crore, up from ₹482.9 crore in the March 2024 quarter. This growth indicates stable operational income despite challenges faced in cost management.

The Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) saw a marginal increase to ₹240.8 crore from ₹239.8 crore last year, but the EBITDA margin contracted by 185 basis points, declining to 47.75% from 49.6%. The contraction in margins signals that the company’s costs grew faster than revenues during the quarter.

Fundraising Strategy and Its Implications

SJVN Ltd has taken a strategic step by approving the raising of funds through securitisation of a part of the future unencumbered free cash flow from the Nathpa Jhakri Hydro Power Station (NJHPS). This move is aimed at mobilising capital for future expansion or debt servicing, reflecting proactive financial management amid current challenges.

This securitisation indicates the company’s efforts to optimise its balance sheet and maintain liquidity, which might have mixed reactions from investors, given the associated risks of encumbering future cash flows.

Stock Market Reaction and Technical Insights

The stock market reacted negatively to the quarterly results, with SJVN shares falling 4.23% to ₹97.84 on May 30. Over the year 2025, the stock has declined about 12%, reflecting investor concerns over profitability and volatility.

The Relative Strength Index (RSI) for SJVN stock stands at 59.2, suggesting the stock is currently trading in a neutral zone — neither overbought nor oversold. The stock’s one-year beta of 1.6 indicates high volatility, meaning the stock’s price is more sensitive to market movements compared to the overall market.

What This Means for Investors

• The net loss in Q4 highlights operational and financial challenges that SJVN needs to address, especially cost control and efficiency.

• The marginal growth in revenue and EBITDA shows the company’s core business remains stable, though margin pressures are a concern.

• The move towards securitisation of future cash flows suggests a strategic shift to fund operations or expansions but comes with future obligations.

• Investors should be cautious, considering the stock’s high volatility and recent downward price trend, balanced against potential long-term value from hydroelectric power assets.

Summary

SJVN Ltd’s March quarter results reveal a mixed performance with a significant net loss but moderate revenue growth. The company’s financial strategies, including securitisation, and the resulting market response reflect the complex dynamics faced by hydroelectric power producers in India. Investors must closely monitor future quarters for improvements in profitability and operational efficiency.

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