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JSW Energy Limited
F2Q11: EBITDA Marginally
Weaker than Expected
Quick Comment – Impact on our views: JSW Energy
reported F2Q11 revenue of Rs8.3bn (up 48% YoY),
EBITDA of Rs2.97bn (down 6% YoY) and adjusted profit
of Rs1.55bn (down 11% YoY). Our estimates for
revenue, EBITDA, and profit were Rs8.3bn, Rs3bn, and
Rs1.46bn, respectively. The company beat our net profit
estimate primarily on higher other income of Rs491mn
against our estimate of Rs250mn.
What's new: Key developments during the quarter were
as follows:
• The company achieved commercial operations of
300 MW at Ratnagiri unit 1.
• The company achieved CoD of the 400KV
Jaigad-New Koyna double circuit transmission line.
• The company refinanced debt of Rs10bn, which
reduced the interest cost by 1.47%. As a result, the
weighted average cost of debt was 11.32%.
• The Vijayanagar plant achieved a PLF of 91%
(despite taking a shutdown) while the Ratnagiri
plant operated at a PLF of 63% due to some
teething problems in the auxiliary facilities. Barmer
plant was shut for annual maintenance for most of
the quarter, but operated at a PLF of nearly 100%
during the time of operation. The net generation was
1,781 MU, of which 64% was sold in the short-term
market and the balance through long-term
contracts.
Other highlights are included on page 2.
Investment Thesis: JSW energy is likely to witness
robust capacity addition in F2011, beyond which the
pace will slow down. In addition, the company’s high
exposure to spot coal makes it vulnerable to downside
risks, in our view. We maintain our Underweight rating
on the stock.
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