JSW Energy expects demand to recover in the third quarter and seeks to assess market opportunities

Highlighting a challenging second quarter for JSW Energy, marked by a 30 per cent decline in trading prices, Sharad Mahendra, joint managing director and chief executive officer, said the fall in market prices was mainly due to high supply and subdued demand.

Mahendra said in an interview with CNBC TV18 that the second quarter, in fact, was very good for both the country and JSW. “Of course, demand remained subdued and there was a slight increase in demand of almost 1.6% compared to the second quarter of last year,” he said.

“The main reason is that we also have to remember that last year in the second quarter there was a significant growth of 11.4% that was witnessed. So, on a higher base, we have seen marginal growth increase by 1.6%. This was also due to prolonged monsoons across the country and this was the main reason why demand growth has been muted in the current year,” he added.

“But there have been a lot of developments in terms of tenders that have taken place, if you remember that in the first six months the country showed the same as in the previous year, when almost 22 gigawatts were tendered, and I am pleased to say that almost 19 to 20% of this JSW Energy bid we managed to win these bids,” Mahendra said in an interview:

On Thursday On October 24, JSW Energy Ltd reported revenue of ₹3,237 crore. with a margin of 52.6% and net profit remaining flat at ₹853.2 crore.

This is an edited excerpt from the interview.


Question: What is the current level of spare capacity at JSW Energy and how did trading prices change in the third quarter, has there been a recovery from second quarter levels?

A: Typically in the second quarter, we saw a significant drop in trading prices in the second quarter, which amounted to almost a 30% drop in prices sold last year, because availability was high and demand was low. In terms of manufacturing activities, which have definitely seen a surge since the third quarter and also from the third and fourth quarters, generally the overall activities improve after the monsoon. So we expect demand to start coming back again. We expect the third quarter to be significantly better than the second quarter.

Question: In the first quarter you approved fundraising in an amount close to ₹10,000 crore. We also know that this applies to the wind turbine (WTG) business. Now, along with this, we also understand that Siemens Gamesa’s asset is actually at risk. Will you be considering acquiring this particular asset and what changes have you seen with the first quarter regarding the WTG business?

A: As far as the WTG business is concerned, if we see in the second quarter when we talk about it, there has been almost 700 megawatts of capacity addition in all of India, of which about 204 megawatts have been commissioned by us. Going forward, whatever capacity increase we see in the second half of the current financial year from our side, the majority will come from wind assets alone.

Regarding the Siemens Gamesa asset, what you asked about, we usually do not comment on a specific asset, but as I said earlier, any opportunity that appears on the market, we will certainly continue to evaluate and how and when it will be realized. fitting into our strategy as well as protecting benchmark returns, we’re definitely continuing to evaluate.

Watch the accompanying video for the full interview.