Adani Power Earnings downgrade continues; Downgrade to Reduce :Emkay

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Adani Power

Earnings downgrade continues; Downgrade to Reduce

REDUCE

CMP: Rs 110                                       Target Price: Rs 103

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n     APL’s Q4 PAT of Rs1.74bn (up 77% yoy and 60% qoq) was below expectation due to higher deferred tax. Otherwise on Revenues/EBITDA/PBT level it is in line 

n     Highlights (1) fuel cost Rs0.95/unit, decline of 9% qoq/18% yoy, (2) aux. of 9%, lower qoq but higher than long-term guidance of 7% & (3) merchant realization Rs4.5/unit in Q411

n     Guiding for slight delay in comm. – 660MW unit II by July-Aug (earlier June) and indications that in Tiroda – might be only one unit in FY12E (earlier two units) – we adjust numbers

n     Valuations pricing cheaper fuel, aggressive execution/ operating parameters & early merchant. Not pricing MAT on SEZ & MCL coal price hike. Downgrade to Reduce