Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Power
n Expect our utilities universe to report 14.5% yoy revenue growth led by commissioning of capacities. EBITDA to grow
by 26% yoy led by operating leverage. However, PAT to decline by 5.0% yoy led by PAT decline in NTPC (change in
grossing up) and JPVL (higher interest due to securitization). PAT ex-NTPC & JPVL to increase by 15.5% yoy.
n 15,795MW added during FY11. Expect further jump in capacity additions starting FY12E with addition of 22,706MW.
n Even after factoring in best case demand estimates (9.6% growth) including latent demand, supply is likely to outpace
demand by end FY13E.
n Merchant prices (day ahead on exchange) were expected to rebound significantly in Q3/Q411 (stood at Rs2.3/unit &
Rs3.6/unit) but that hasn’t been the case till now. Its just 2.5 months window before the monsoon impact again kicks
in and result in lower merchant prices. Expect lower prices in exchanges to escalate to bilateral trades and see
significant downside risk to consensus (also ours) merchant tariff of Rs4/unit and Rs3.5/unit in FY12E and long term
respectively. Our estimate for sustainable merchant rates stands at Rs2.7/unit.
n Unsustainable SEB losses (Rs740bn – FY10) to trigger panic situation starting FY12E and SEBs to resort to price
caps, power cuts/demand management, payment delays etc.
n IPP valuations still factors in a (1) long term merchant rate of Rs3.5/unit, (2) coal supply at linkage rates, (3) high PLFs
of 85%+ and (4) significant latent demand. We reiterate negative view on private power utilities and prefer regulated
utilities. Our top picks are power grid (not covered) and NTPC (lower risks, reasonable valuations and improving
execution).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Power
n Expect our utilities universe to report 14.5% yoy revenue growth led by commissioning of capacities. EBITDA to grow
by 26% yoy led by operating leverage. However, PAT to decline by 5.0% yoy led by PAT decline in NTPC (change in
grossing up) and JPVL (higher interest due to securitization). PAT ex-NTPC & JPVL to increase by 15.5% yoy.
n 15,795MW added during FY11. Expect further jump in capacity additions starting FY12E with addition of 22,706MW.
n Even after factoring in best case demand estimates (9.6% growth) including latent demand, supply is likely to outpace
demand by end FY13E.
n Merchant prices (day ahead on exchange) were expected to rebound significantly in Q3/Q411 (stood at Rs2.3/unit &
Rs3.6/unit) but that hasn’t been the case till now. Its just 2.5 months window before the monsoon impact again kicks
in and result in lower merchant prices. Expect lower prices in exchanges to escalate to bilateral trades and see
significant downside risk to consensus (also ours) merchant tariff of Rs4/unit and Rs3.5/unit in FY12E and long term
respectively. Our estimate for sustainable merchant rates stands at Rs2.7/unit.
n Unsustainable SEB losses (Rs740bn – FY10) to trigger panic situation starting FY12E and SEBs to resort to price
caps, power cuts/demand management, payment delays etc.
n IPP valuations still factors in a (1) long term merchant rate of Rs3.5/unit, (2) coal supply at linkage rates, (3) high PLFs
of 85%+ and (4) significant latent demand. We reiterate negative view on private power utilities and prefer regulated
utilities. Our top picks are power grid (not covered) and NTPC (lower risks, reasonable valuations and improving
execution).
No comments:
Post a Comment