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JPVL: Results above estimates on higher income, sale of VERs…
Jaiprakash Ventures Ltd (JPVL) reported its Q3FY11 results above our
estimates on account of higher other operating income (6x YoY) and sales
of VERs. Core sales (by sale of electricity) was reported at | 129 crore
(growth of 13.2% YoY) on account of higher generation (671 MUs vs. 512
MUs units in Q3FY10). EBITDA came in at | 156.3 crore (growth of 61.6%
YoY). However, core EBITDA (excluding other operating income and
VERs) stood at | 104 crore (growth of only 7.4% YoY) on account of
higher O&M and other expenditure. Interest cost for the company
increased to | 104 crore (106% YoY) on account of securitisation of
receivables of its operating projects (Baspa-II and Vishnuprayag power
plants). The company reported PAT of | 22.8 crore, up 35.1% (YoY).
Commissioning of ~ 1500 MW in FY12E
We expect the company to add 1500 MW in FY12E, which includes 1000
MW of hydro power plant at Karcham Wangtoo and 500 MW at Bina, MP.
The full impact of commissioning would be visible in FY12E numbers.
Income from carbon credits set to increase in FY12E
In Q3FY11, JPVL booked | 22.4 crore as income from sale of verified
emission reduction (VERs). For the entire year, we expect VER sales to be
~ | 35 crore. We expect VER sales to increase by 14-15% in FY12E on
account of commissioning of 1000 MW Karcham Wangtoo power plant.
From FY12E onwards, JPVL is entitled to 2-3 million VERs per annum. The
realisation from this certificate is close to €3.5 – 4 per VER.
Valuation
At the CMP of | 50, the stock offers ~18% upside. The execution
capability of parent company (JAL) renders significant comfort to
upcoming expansion plans. However, considering the medium-term
macro headwinds, we are only taking projects commissioning by FY15 in
our valuation. On the recent price correction, we are revising our target
price to | 59 with BUY rating.
Upside from carbon credits
In Q3FY11, JPVL booked | 22.4 crore as income from sale of verified
emission reduction (VERs). For the entire year, we expect VER sales to be
~ | 35 crore. We expect VER sales to increase by 14-15% in FY12E on
account commissioning of the 1000 MW Karcham Wangtoo power plant.
From FY12E onwards, the company is entitled to 2-3 million VERs per
annum. The realisation from this certificate is close to €3.5 - 4per VER. For
FY12E, we estimate VER income to be ~ | 40-45 crore.
Valuation
At the CMP of | 50, the stock offers ~18% upside. The execution
capability of the parent company (JAL) renders significant comfort to
upcoming expansion plans. However, considering the medium term
macro headwinds, we are only taking projects commissioning by FY15 in
our valuation. On the recent price correction, we are revising our target
price to | 59 with a BUY rating.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
JPVL: Results above estimates on higher income, sale of VERs…
Jaiprakash Ventures Ltd (JPVL) reported its Q3FY11 results above our
estimates on account of higher other operating income (6x YoY) and sales
of VERs. Core sales (by sale of electricity) was reported at | 129 crore
(growth of 13.2% YoY) on account of higher generation (671 MUs vs. 512
MUs units in Q3FY10). EBITDA came in at | 156.3 crore (growth of 61.6%
YoY). However, core EBITDA (excluding other operating income and
VERs) stood at | 104 crore (growth of only 7.4% YoY) on account of
higher O&M and other expenditure. Interest cost for the company
increased to | 104 crore (106% YoY) on account of securitisation of
receivables of its operating projects (Baspa-II and Vishnuprayag power
plants). The company reported PAT of | 22.8 crore, up 35.1% (YoY).
Commissioning of ~ 1500 MW in FY12E
We expect the company to add 1500 MW in FY12E, which includes 1000
MW of hydro power plant at Karcham Wangtoo and 500 MW at Bina, MP.
The full impact of commissioning would be visible in FY12E numbers.
Income from carbon credits set to increase in FY12E
In Q3FY11, JPVL booked | 22.4 crore as income from sale of verified
emission reduction (VERs). For the entire year, we expect VER sales to be
~ | 35 crore. We expect VER sales to increase by 14-15% in FY12E on
account of commissioning of 1000 MW Karcham Wangtoo power plant.
From FY12E onwards, JPVL is entitled to 2-3 million VERs per annum. The
realisation from this certificate is close to €3.5 – 4 per VER.
Valuation
At the CMP of | 50, the stock offers ~18% upside. The execution
capability of parent company (JAL) renders significant comfort to
upcoming expansion plans. However, considering the medium-term
macro headwinds, we are only taking projects commissioning by FY15 in
our valuation. On the recent price correction, we are revising our target
price to | 59 with BUY rating.
Upside from carbon credits
In Q3FY11, JPVL booked | 22.4 crore as income from sale of verified
emission reduction (VERs). For the entire year, we expect VER sales to be
~ | 35 crore. We expect VER sales to increase by 14-15% in FY12E on
account commissioning of the 1000 MW Karcham Wangtoo power plant.
From FY12E onwards, the company is entitled to 2-3 million VERs per
annum. The realisation from this certificate is close to €3.5 - 4per VER. For
FY12E, we estimate VER income to be ~ | 40-45 crore.
Valuation
At the CMP of | 50, the stock offers ~18% upside. The execution
capability of the parent company (JAL) renders significant comfort to
upcoming expansion plans. However, considering the medium term
macro headwinds, we are only taking projects commissioning by FY15 in
our valuation. On the recent price correction, we are revising our target
price to | 59 with a BUY rating.
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