Recent Price Movement and Market Context
SJVN . recorded a day-on-day decline of 1.45%, underperforming its sector by 1.55% on the trading day. The stock has been trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent weakness in price momentum. Over the last week, the stock has delivered a cumulative return of -5.99%, reflecting sustained selling pressure.
In contrast, the broader market has shown resilience. The Sensex opened 108.22 points higher and was trading at 85,042.53, up 0.17% on the day, and just 0.89% shy of its 52-week high of 85,801.70. The index is supported by mega-cap stocks and is positioned above its 50-day and 200-day moving averages, indicating a bullish trend overall. This divergence highlights the relative underperformance of SJVN . within the power sector and the wider market.
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Financial Performance and Profitability Trends
Over the past year, SJVN . has recorded a total return of -30.77%, a stark contrast to the Sensex’s positive return of 6.15% during the same period. The stock’s 52-week high was Rs.124.45, indicating a substantial decline of approximately 37% from that peak to the current low.
The company’s financial metrics reveal subdued growth and profitability. Net sales have expanded at an annual rate of 4.07% over the last five years, while operating profit growth has been marginal at 0.54% annually. This slow pace of expansion has coincided with a return on equity averaging 7.94%, reflecting modest profitability relative to shareholders’ funds.
Profit before tax excluding other income for the most recent quarter stood at Rs.376.01 crore, down by 24.56% compared to the previous period. Net profit after tax for the quarter was Rs.307.91 crore, showing a decline of 30.2%. The company’s return on capital employed (ROCE) for the half-year was recorded at 4.08%, one of the lowest levels in recent times, underscoring challenges in generating efficient returns on invested capital.
Debt and Valuation Considerations
SJVN . carries a relatively high debt burden, with a Debt to EBITDA ratio of 6.40 times. This level indicates a constrained capacity to service debt from earnings before interest, taxes, depreciation, and amortisation. The enterprise value to capital employed ratio stands at 1.4, suggesting a valuation that is elevated relative to the company’s capital base.
Despite this, the stock is trading at a discount compared to the average historical valuations of its peers in the power sector. This valuation gap reflects market caution given the company’s recent financial performance and growth trajectory.
Comparative Market Performance
While the BSE500 index has generated returns of 4.72% over the past year, SJVN . has significantly underperformed, delivering negative returns of -30.77%. This divergence highlights the stock’s relative weakness within the broader market context and the power sector.
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Shareholding and Sector Position
The majority shareholding in SJVN . is held by promoters, maintaining a concentrated ownership structure. The company operates within the power industry, a sector that has seen mixed performance across its constituents in recent months.
Despite the stock’s recent lows, the power sector overall has shown resilience, supported by stable demand fundamentals and government initiatives. However, SJVN .’s financial indicators and price action suggest it has faced headwinds distinct from broader sector trends.
Summary of Key Metrics
To summarise, SJVN .’s stock price has reached Rs.77.92, its lowest level in 52 weeks, following a seven-day losing streak. The company’s subdued sales growth, declining profits, low return on capital, and elevated debt levels have contributed to this performance. Meanwhile, the broader market and sector indices have maintained positive momentum, underscoring the stock’s relative underperformance.
Investors and market participants will note the contrast between SJVN .’s current valuation and its historical peer averages, as well as the divergence from the Sensex’s upward trajectory. These factors provide a comprehensive view of the stock’s recent market behaviour and financial standing.
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