Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
GVK Power and Infrastructure
Q3FY11: Results below estimates
Curtailed gas supply for power plants affected Q3
GVK reported consolidated PAT of Rs419m (-8% y/y, UBS-e Rs521m), Operating
profit of Rs1.29bn (-8% y/y, UBSe Rs1.42bn) and revenues of Rs4.6bn (-3% y/y).
The operating results were lower than our estimates and consensus due to lowerthan-
expected power segment performance mainly led by 15% curtailed gas supply
by RIL led to low PLF (~ 80%) in power plants.
Robust traffic growth in airports, though road traffic remains flat in Q3
Profit from associates was Rs307m, better than our expectation of Rs227m mainly
led by robust growth in traffic for both MIAL and BIAL. MIAL pax growth was
~10% y/y in Q3 (13% in 9M, UBS-e of 9% in FY11) and BIAL pax growth was
17% (18% in 9M, UBS-e of 12% in FY11). JKEL traffic remained flat for Q3 y/y,
but increased 2% for 9M y/y in our estimate (UBS-e of 7% in FY11), lower traffic
was led by an 11% y/y decline in traffic from trucks in 9M.
Power projects: Significant positive developments
The key take-away from the conference call are; 1) Unit I of 400 MW at Jegrupadu
III the company has already issued the notice to proceed and for 1200MW by Mar-
11, 2) In Q2FY12 the company expects to start the monetisation of first trench of
Mumbai real estate., 3) First unit of Goindwal Sahib is expected to commence by
Sep-12 and the II unit will be commissioned by end of 2012.
Valuation: Buy rating with PT of Rs55
Power/real estate (airport-related and SEZ)/airports (core) are 37/31/17% of our
valuation. GVK is our most preferred pick among diversified developers.
Income at the standalone level (consolidated minus- power plants and road
asset) is lower than our expectation. This income might be lumpy in nature and
might not flow uniformly across quarters (we do not ascribe any separate value
to such income).
Con call highlights
Week power segment performance: 1) mainly came due to 15% curtailed
supply of Gas from RIL due to some technical reasons led to fall in PLF to 80%
level for power projects; and 2) lower dispatch instructions from APdiscoms for
supply of power in night because all hydro power projects were working at full
capacity (led by heavy rains).
Fresh borrowings: Company raised Rs2bn in the quarter at an interest of 9%
for funding the Jegrupadu III and Gautami expansions. The money was also
used for requirements in Oil and Gas segment.
Refinancing of BIAL debt: A debt of Rs7.5bn has been refinanced at 10%
interest cost the payment will now due in Dec-11. Company expects to bring PE
player in airport segment in next couple of quarters.
Interested in acquiring coal assets: Company guided that they are interest in
acquiring coal assets across the world to focus on coal based power plants.
MOU signed for two airports in Indonesia: Signed the MOU and has 1 year
of time to do the feasibility study.
Expansion plans for Jegrupadu III and Gautami of about 1,600MW: For
unit I of 400 MW at Jegrupadu III the company has already issues notice to
proceed and for others the company expects to issue the notice Mar-11.
Mumbai Real estate monetisation: In Q2FY12 the company expects to start
the monetisation of first trench of Mumbai real estate.
MAT credit: Taxes was negative on consolidated level for the quarter due to
MAT credit taken by the company.
Goindwal Sahib and Alaknanda projects: First unit of Goindwal Sahib is
expected to commence by Sep-12 and the II unit will be commissioned by end
of 2012. Alkananda power plant is expected to be operational in Q1FY13
Valuation: Buy with PT of Rs55
Our PT comprises: 1) Rs20 for power; 2) Rs17 for real estate (airport related); 3)
Rs9 for airports (core); 4) Rs8 for the road; and 5) Rs1 for its cash and
investments (at the parent level).
GVK Power and Infrastructure
GVK Power and Infrastructure is a leading and diversified infrastructure
developer. Its asset portfolio (attributable) includes: 1) about 2,000MW of
power capacity (including 1,240MW under construction; an additional
2,300MW is planned); 2) two airports (Mumbai and Bengaluru) with maximum
passenger throughput of about 33m; 3) one 90km BOT road project; 4) coal
mines (for captive purposes) with reserves of about110m tons; 5) one 2,900-acre
Special Economic Zone; and 6) about 220 acres of real estate near Mumbai and
Bengaluru airports.
Statement of Risk
In our view the key risks for GVK with regard to airport projects are: a)
execution delays; b) regulatory risks related to revenue; and c) traffic risks. With
regard to power projects, we believe the key risks are: a) shortages in fuel
supply; and b) collection risks. For road projects: a) traffic; and b) collection are
key risks. All of GVK’s projects face interest rate-related risk.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
GVK Power and Infrastructure
Q3FY11: Results below estimates
Curtailed gas supply for power plants affected Q3
GVK reported consolidated PAT of Rs419m (-8% y/y, UBS-e Rs521m), Operating
profit of Rs1.29bn (-8% y/y, UBSe Rs1.42bn) and revenues of Rs4.6bn (-3% y/y).
The operating results were lower than our estimates and consensus due to lowerthan-
expected power segment performance mainly led by 15% curtailed gas supply
by RIL led to low PLF (~ 80%) in power plants.
Robust traffic growth in airports, though road traffic remains flat in Q3
Profit from associates was Rs307m, better than our expectation of Rs227m mainly
led by robust growth in traffic for both MIAL and BIAL. MIAL pax growth was
~10% y/y in Q3 (13% in 9M, UBS-e of 9% in FY11) and BIAL pax growth was
17% (18% in 9M, UBS-e of 12% in FY11). JKEL traffic remained flat for Q3 y/y,
but increased 2% for 9M y/y in our estimate (UBS-e of 7% in FY11), lower traffic
was led by an 11% y/y decline in traffic from trucks in 9M.
Power projects: Significant positive developments
The key take-away from the conference call are; 1) Unit I of 400 MW at Jegrupadu
III the company has already issued the notice to proceed and for 1200MW by Mar-
11, 2) In Q2FY12 the company expects to start the monetisation of first trench of
Mumbai real estate., 3) First unit of Goindwal Sahib is expected to commence by
Sep-12 and the II unit will be commissioned by end of 2012.
Valuation: Buy rating with PT of Rs55
Power/real estate (airport-related and SEZ)/airports (core) are 37/31/17% of our
valuation. GVK is our most preferred pick among diversified developers.
Income at the standalone level (consolidated minus- power plants and road
asset) is lower than our expectation. This income might be lumpy in nature and
might not flow uniformly across quarters (we do not ascribe any separate value
to such income).
Con call highlights
Week power segment performance: 1) mainly came due to 15% curtailed
supply of Gas from RIL due to some technical reasons led to fall in PLF to 80%
level for power projects; and 2) lower dispatch instructions from APdiscoms for
supply of power in night because all hydro power projects were working at full
capacity (led by heavy rains).
Fresh borrowings: Company raised Rs2bn in the quarter at an interest of 9%
for funding the Jegrupadu III and Gautami expansions. The money was also
used for requirements in Oil and Gas segment.
Refinancing of BIAL debt: A debt of Rs7.5bn has been refinanced at 10%
interest cost the payment will now due in Dec-11. Company expects to bring PE
player in airport segment in next couple of quarters.
Interested in acquiring coal assets: Company guided that they are interest in
acquiring coal assets across the world to focus on coal based power plants.
MOU signed for two airports in Indonesia: Signed the MOU and has 1 year
of time to do the feasibility study.
Expansion plans for Jegrupadu III and Gautami of about 1,600MW: For
unit I of 400 MW at Jegrupadu III the company has already issues notice to
proceed and for others the company expects to issue the notice Mar-11.
Mumbai Real estate monetisation: In Q2FY12 the company expects to start
the monetisation of first trench of Mumbai real estate.
MAT credit: Taxes was negative on consolidated level for the quarter due to
MAT credit taken by the company.
Goindwal Sahib and Alaknanda projects: First unit of Goindwal Sahib is
expected to commence by Sep-12 and the II unit will be commissioned by end
of 2012. Alkananda power plant is expected to be operational in Q1FY13
Valuation: Buy with PT of Rs55
Our PT comprises: 1) Rs20 for power; 2) Rs17 for real estate (airport related); 3)
Rs9 for airports (core); 4) Rs8 for the road; and 5) Rs1 for its cash and
investments (at the parent level).
GVK Power and Infrastructure
GVK Power and Infrastructure is a leading and diversified infrastructure
developer. Its asset portfolio (attributable) includes: 1) about 2,000MW of
power capacity (including 1,240MW under construction; an additional
2,300MW is planned); 2) two airports (Mumbai and Bengaluru) with maximum
passenger throughput of about 33m; 3) one 90km BOT road project; 4) coal
mines (for captive purposes) with reserves of about110m tons; 5) one 2,900-acre
Special Economic Zone; and 6) about 220 acres of real estate near Mumbai and
Bengaluru airports.
Statement of Risk
In our view the key risks for GVK with regard to airport projects are: a)
execution delays; b) regulatory risks related to revenue; and c) traffic risks. With
regard to power projects, we believe the key risks are: a) shortages in fuel
supply; and b) collection risks. For road projects: a) traffic; and b) collection are
key risks. All of GVK’s projects face interest rate-related risk.
No comments:
Post a Comment