Reliance Power Management Meet Update; Guiding for aggressive coal production; Accumulate; Target: Rs 157 :: Emkay

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Reliance Power Management Meet Update; Guiding for aggressive coal production; Accumulate; Target: Rs 157

n    Sasan coal mine to start prod. by June 2012, ahead of COD of 1st unit in Dec. 2012. Further, it expects to ramp up coal prod. to peak 25mn MT by FY15E - in line with COD of Sasan II & Chitrangi in Sep. 2013 - Mar. 2015

n    Tilaiya coal mine is expected to start prod. by Sep. 2013 (ahead of Tilaiya’s commissioning in FY16E) and ramp up to peak prod. of 40mn MT by FY17E

n    Captive coal mines (prod. capacity of 65mn MT) allotted with UMPPs has high quality cheap coal, which co. also plans to use at Chitrangi/Sasan-II (60% of NPV) projects to take advantage of low cost of generation

n    RPL has one of the most sustainable pvt utility business model (fuel cost /unit - less than Rs0.42/unit) & also a coal play. Valuations imply Rs2.8/unit (relatively lower) tariffs. Relatively prefer RPL & Lanco in our private utility coverage