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Tata Power Co
F2011 Consolidated Profit
Lower than Estimate
Quick Comment – Impact on our views: Tata Power
reported F2011 adjusted standalone revenue of
Rs69.2bn (up 1% YoY), EBITDA of Rs15.5bn (down 4%
YoY), and adjusted profit of Rs8.7bn (up 26% YoY). We
had estimated profit of Rs7.4bn primarily due to higher
tax expense.
For F2011, consolidated revenue was Rs192.8bn (up
3% YoY), EBITDA was Rs40.9bn (up 11% YoY) and
adjusted profit was Rs15.4bn (up 16% YoY). Our
consolidated profit estimate was Rs16.6bn.
Key developments: The company has completed 80%
of the work on the Mundra UMPP and is expecting to
commission the first unit in September 2011. On the
Maithon project, 95% of the work is completed, and the
first unit is expected to be commissioned in June 2011
and the second unit four months later. The progress on
company’s other plants are shown in Exhibits 3 and 4.
During F4Q11, the company sold 314 MUs of merchant
power at an average realization of Rs4.1/unit. The coal
companies sold 14mt of coal at a realized price of
US$87/t, although the cash cost was higher at US$41/t.
For coal supplies of 2.6 mtpa from the Indonesian coal
assets to Mundra UMPP, where coal prices are fixed for
the first five years, there is a possibility that the
Indonesian government may demand higher prices. If
this goes through, the purchase cost could increase by
US$30-35/t, thus affecting the fair value of the power
project. The regulated equity in the Mumbai License
Area is Rs22.2bn and in NDPL is Rs8.3bn. The
company announced a dividend of Rs12.50/sh and a
stock split of 10 for 1.
Investment thesis: We believe the company is meeting
its execution timeline for the Mundra and Maithon power
projects, setting it apart from its peers. However, the
stock is trading at ~2x P/B and 9.3x EV/EBITDA on our
F2012 consolidated estimates; we maintain our
Equal-weight rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Power Co
F2011 Consolidated Profit
Lower than Estimate
Quick Comment – Impact on our views: Tata Power
reported F2011 adjusted standalone revenue of
Rs69.2bn (up 1% YoY), EBITDA of Rs15.5bn (down 4%
YoY), and adjusted profit of Rs8.7bn (up 26% YoY). We
had estimated profit of Rs7.4bn primarily due to higher
tax expense.
For F2011, consolidated revenue was Rs192.8bn (up
3% YoY), EBITDA was Rs40.9bn (up 11% YoY) and
adjusted profit was Rs15.4bn (up 16% YoY). Our
consolidated profit estimate was Rs16.6bn.
Key developments: The company has completed 80%
of the work on the Mundra UMPP and is expecting to
commission the first unit in September 2011. On the
Maithon project, 95% of the work is completed, and the
first unit is expected to be commissioned in June 2011
and the second unit four months later. The progress on
company’s other plants are shown in Exhibits 3 and 4.
During F4Q11, the company sold 314 MUs of merchant
power at an average realization of Rs4.1/unit. The coal
companies sold 14mt of coal at a realized price of
US$87/t, although the cash cost was higher at US$41/t.
For coal supplies of 2.6 mtpa from the Indonesian coal
assets to Mundra UMPP, where coal prices are fixed for
the first five years, there is a possibility that the
Indonesian government may demand higher prices. If
this goes through, the purchase cost could increase by
US$30-35/t, thus affecting the fair value of the power
project. The regulated equity in the Mumbai License
Area is Rs22.2bn and in NDPL is Rs8.3bn. The
company announced a dividend of Rs12.50/sh and a
stock split of 10 for 1.
Investment thesis: We believe the company is meeting
its execution timeline for the Mundra and Maithon power
projects, setting it apart from its peers. However, the
stock is trading at ~2x P/B and 9.3x EV/EBITDA on our
F2012 consolidated estimates; we maintain our
Equal-weight rating on the stock.
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