SJVN stock plunges 2% after Goldman Sachs anticipates 40% decline in share price

The share price of SJVN dropped significantly to an intraday low of ₹136.51 on the National Stock Exchange (NSE) on August 21, declined by 1.46 percent from its previous close after Goldman Sachs reaffirmed its ‘Sell’ recommendation on the state-owned hydropower company.

The analysts at the global brokerage set a new target price of ₹85 per share, up from their previous recommendation of ₹75 per share.

The price target suggests a potential 38 percent downside from current levels revised in Wednesday’s trading session.

Goldman Sachs is one of the two analysts covering SJVN with a “sell” rating on the stock. On the other hand, three other analysts have given a “buy” recommendation, and one has a “hold” call.

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According to the brokerage report, the commissioning of SJVN’s 1,320 MW Thermal Power Plant in Buxar has faced additional delays. Unit-1 is now expected to be operational by the end of the 2025 financial year, while Unit-2 is slated for commissioning in the 2026 financial year.

The global brokerage noted that SJVN could benefit from several positive factors moving forward, including new opportunities, better-than-expected successes and execution in renewable projects, an encouraging acceleration in the renewable energy sector, and a significant decrease in debt costs.

The company is planning to raise ₹2,000 crore through the SJVN Green Energy Initial Public Offering (IPO).

The stock has been declining for the past three days, dropping by 4.3 percent during this period and is trading below the 5-50 day moving averages.

In July, the company announced that it received a Letter of Intent (LoI) from the Government of Mizoram for the allocation of the Darzo Lui Pumped Storage Project. The project is expected to cost ₹13,947.50 crore, including interest during construction (IDC) and financing costs based on April 2023 prices, according to a filing with the exchange.

The hydropower company reported a 31 percent year-on-year increase in consolidated net profit, reaching ₹357 crore in Q1FY25, driven by higher income. Its total income increased by 29 percent year-on-year to ₹958.47 crores.