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Strong 4QFY11 results
Adani Power reported strong growth in generation in 4Q and the
company now has 1.98GW commercial capacity. The average realization
was Rs3.14/kWh during the quarter while the company sold 12% of its
output at Rs4.5/kWh in the short term market. Due to high load factors
and one additional month of generation of 660MW unit, the Ebidta and
PBT numbers were higher than our estimates. Net profit was however
broadly in line given the high deferred tax expenses. We expect FY12 to
be a strong volume growth year for the company however the coal
supplies from Coal India would be a key challenge.
Strong growth in generation in 4Q; PLF at 89%
Adani Power reported a strong 56% QoQ (340% YoY) growth in generation in
4QFY11. The PLF also improved from 85% in 3Q to 89% in 4Q. For the full
year the company generated 7.6bn kWh as against our estimate of 7.5bn
kWh. The key difference was one month operation of 660MW unit of Mundra
III which was not included in our estimates. The auxiliary consumption at
9.3% was the lowest in last five quarters.
Average tariff at Rs3.14/kWh; fuel cost at Rs0.95/kWh
The average tariff in 4Q was Rs3.14/kWh as compared to Rs3.27/kWh in
4QFY10 – down 4% YoY. The company sold 320m kWh (12% of sales) in the
short term market at an average realization of Rs4.5/kWh in 4Q. We estimate
the landed fuel (coal) cost during the quarter was ~Rs1,678/t or US$36/t
which translated into fuel expense of Rs0.95/kWh. Ebidta and PBT was higher
than our estimates given higher sales though the reported net profit was
broadly in line due to higher deferred tax expenses – due to higher
depreciation under Income Tax Act.
Strong volume growth in FY12; fuel would be a key challenge
Adani Power is targeting to commission full Mundra project (4,620MW) and
two units of Tiroda (2 x660MW) by the end of FY12. We expect over 3x
growth in generation and quadrupling of profits over the same period. The
key challenge would remain the fuel supplies especially post commissioning of
Tiroda (which is 800-1,200km away from nearest port on both east and west
coastline). We estimate the company would require ~13mt of coal in FY12 of
which ~8mt could be sourced through Bunyu mines (owned by AEL) and
balance needs to be sourced from Coal India and other sources (the company
is yet to receive any coal from Coal India for its existing 1,980MW capacity at
Mundra). We maintain our Outperform rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Strong 4QFY11 results
Adani Power reported strong growth in generation in 4Q and the
company now has 1.98GW commercial capacity. The average realization
was Rs3.14/kWh during the quarter while the company sold 12% of its
output at Rs4.5/kWh in the short term market. Due to high load factors
and one additional month of generation of 660MW unit, the Ebidta and
PBT numbers were higher than our estimates. Net profit was however
broadly in line given the high deferred tax expenses. We expect FY12 to
be a strong volume growth year for the company however the coal
supplies from Coal India would be a key challenge.
Strong growth in generation in 4Q; PLF at 89%
Adani Power reported a strong 56% QoQ (340% YoY) growth in generation in
4QFY11. The PLF also improved from 85% in 3Q to 89% in 4Q. For the full
year the company generated 7.6bn kWh as against our estimate of 7.5bn
kWh. The key difference was one month operation of 660MW unit of Mundra
III which was not included in our estimates. The auxiliary consumption at
9.3% was the lowest in last five quarters.
Average tariff at Rs3.14/kWh; fuel cost at Rs0.95/kWh
The average tariff in 4Q was Rs3.14/kWh as compared to Rs3.27/kWh in
4QFY10 – down 4% YoY. The company sold 320m kWh (12% of sales) in the
short term market at an average realization of Rs4.5/kWh in 4Q. We estimate
the landed fuel (coal) cost during the quarter was ~Rs1,678/t or US$36/t
which translated into fuel expense of Rs0.95/kWh. Ebidta and PBT was higher
than our estimates given higher sales though the reported net profit was
broadly in line due to higher deferred tax expenses – due to higher
depreciation under Income Tax Act.
Strong volume growth in FY12; fuel would be a key challenge
Adani Power is targeting to commission full Mundra project (4,620MW) and
two units of Tiroda (2 x660MW) by the end of FY12. We expect over 3x
growth in generation and quadrupling of profits over the same period. The
key challenge would remain the fuel supplies especially post commissioning of
Tiroda (which is 800-1,200km away from nearest port on both east and west
coastline). We estimate the company would require ~13mt of coal in FY12 of
which ~8mt could be sourced through Bunyu mines (owned by AEL) and
balance needs to be sourced from Coal India and other sources (the company
is yet to receive any coal from Coal India for its existing 1,980MW capacity at
Mundra). We maintain our Outperform rating on the stock.
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