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UBS Investment Research
Reliance Power
3Q FY11: Other income declined 42% YoY
Rs2.51bn of Sales and Rs1.44bn of PAT in 3Q FY11
In 3Q FY11, Reliance Power has reported Rs2.51bn of operating revenue and
Rs1.04bn (-42% YoY) of other income. The reported PAT is Rs1.44bn. The
company has been operating the first stage of Rosa (600MW) in this quarter.
Company’s depreciation charge was lower by Rs113mn in Q3 due to change in
depreciation accounting for Rosa Unit I from rates prescribed in Companies act to
rates notified by UPERC.
3Q FY11 Results are not comparable with previous year
The company did not have any operating income in 3Q FY10 and hence 3Q FY11
results are not comparable with previous year quarter. The comparison is not really
meaningful, 3Q FY11 other income has decreased 42% YoY and PAT was up 7%
YoY. The company has recorded negative tax provision of Rs544m that has
boosted the PAT, as per notes to accounts there is no exceptional in the quarter.
Expects to receive Rs20bn value of carbon credits in ten years for Sasan
The company highlighted that its 4,000MW Sasan UMPP has registered for carbon
credits and estimates to receive Rs20bn of value as carbon credits in ten years. As
per company the 2,400MW gas based power plant at Samalkot is on track and the
first two gas turbines from USA will be shipped in May-11.
Valuation: Maintain Sell rating and price target of Rs140
We base our price target on DCF. We believe the key upside risks are: 1) clarity on
gas availability; 2) financial closure for projects; and 3) new project wins.
3Q FY11 - Not comparable with previous year
In 3Q FY11, Reliance Power has reported Rs2.51bn of operating revenue and
Rs1.04bn of other income. The reported PAT is Rs1.44bn. The company has
operated the first stage of Rosa (600MW) in this quarter.
Reliance Power
Reliance Power is a subsidiary of Reliance-ADA Group (one of India's largest
business groups) in the power generation sector. With a project pipeline of
28,200MW, Reliance Power targets to become one of the largest private sector
generation companies in India by 2017. The projects are well diversified with a
coal:gas:hydro mix of 52:36:12, and plants in six states across 13 locations.
Reliance Power expects to start power generation in FY11.
Statement of Risk
The key risks are fuel availability; equipment availability and performance;
funding costs; and payment security, as well as off-take related and project
execution risks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Reliance Power
3Q FY11: Other income declined 42% YoY
Rs2.51bn of Sales and Rs1.44bn of PAT in 3Q FY11
In 3Q FY11, Reliance Power has reported Rs2.51bn of operating revenue and
Rs1.04bn (-42% YoY) of other income. The reported PAT is Rs1.44bn. The
company has been operating the first stage of Rosa (600MW) in this quarter.
Company’s depreciation charge was lower by Rs113mn in Q3 due to change in
depreciation accounting for Rosa Unit I from rates prescribed in Companies act to
rates notified by UPERC.
3Q FY11 Results are not comparable with previous year
The company did not have any operating income in 3Q FY10 and hence 3Q FY11
results are not comparable with previous year quarter. The comparison is not really
meaningful, 3Q FY11 other income has decreased 42% YoY and PAT was up 7%
YoY. The company has recorded negative tax provision of Rs544m that has
boosted the PAT, as per notes to accounts there is no exceptional in the quarter.
Expects to receive Rs20bn value of carbon credits in ten years for Sasan
The company highlighted that its 4,000MW Sasan UMPP has registered for carbon
credits and estimates to receive Rs20bn of value as carbon credits in ten years. As
per company the 2,400MW gas based power plant at Samalkot is on track and the
first two gas turbines from USA will be shipped in May-11.
Valuation: Maintain Sell rating and price target of Rs140
We base our price target on DCF. We believe the key upside risks are: 1) clarity on
gas availability; 2) financial closure for projects; and 3) new project wins.
3Q FY11 - Not comparable with previous year
In 3Q FY11, Reliance Power has reported Rs2.51bn of operating revenue and
Rs1.04bn of other income. The reported PAT is Rs1.44bn. The company has
operated the first stage of Rosa (600MW) in this quarter.
Reliance Power
Reliance Power is a subsidiary of Reliance-ADA Group (one of India's largest
business groups) in the power generation sector. With a project pipeline of
28,200MW, Reliance Power targets to become one of the largest private sector
generation companies in India by 2017. The projects are well diversified with a
coal:gas:hydro mix of 52:36:12, and plants in six states across 13 locations.
Reliance Power expects to start power generation in FY11.
Statement of Risk
The key risks are fuel availability; equipment availability and performance;
funding costs; and payment security, as well as off-take related and project
execution risks.
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