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India Equity Research Reports, IPO and Stock News
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• Utilities continue to underperform. Lanco led the decline with weak 4Q
earnings fraught with accounting adjustments. JSWE saw a relief rally in
the last couple of days as the acquisition of CIC Energy, which could have
strained its resources, fell through. Adani Power, our top pick, was the
standout performer, on the back of strong operating results and PLF data.
• AP-based gas capacities showed sharp PLF pick-up in May, on the
back of RIL-GAIL gas swap agreement. Eg: Lanco’s Kondapalli (79%
vs. 60% in 4Q), GVK’s Gautami (93% vs. 73%) and J1&2 (83% vs.
69%); GMR’s Vemagiri (99% vs. 75%) and Kakinada (80% vs. 63%).
The RIL-GAIL gas swap agreement, valid thru May, entailed RIL
diverting 2.6mmscmd of gas to AP (@ LNG prices), from Gujarat, in
exchange for equivalent LNG supplies (@ domestic gas prices) to the
latter. The objective was to meet power demand in deficit states like AP
which lacks connectivity to LNG terminals. On the other hand, NTPC's
gas-based plants saw just 58% PLF, vs 72% in FY11.
• Will there be more gas? JPM oil and gas analyst, Pradeep Mirchandani,
expects LNG imports to increase by 40-45% in FY12 vs. 32mmscmd in
FY11 – this would compensate for the 12mmscmd shortfall in KG-D6 gas
production (currently at ~48mmscmd). We spoke to GMR, and understand
1) that IPPs are keen that the gas-swap agreement should extend and 2) AP
govt. likely okay with higher resultant fuel cost for pass-through projects
(eg Vemagiri). RIL said at its AGM today that it would make vigorous
efforts to ramp up production. All these potential developments would
enhance fuel security for gas-based projects and favour GMR, GVK and
Lanco (which account for 2.4 out of 2.7GW of AP-based gas capacity).
• RPWR and JSW’s coal capacities reported weak PLFs while Adani
and NTPC numbers strong. Rosa and Vijaynagar operated at a decent
84% and 94% PLF in May, however saw lower than YTD levels. But
performance of JSW’s Ratnagiri and Barmer plants declined significantly.
Adani's Mundra operated at strong 87% and NTPC at >85%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
• Utilities continue to underperform. Lanco led the decline with weak 4Q
earnings fraught with accounting adjustments. JSWE saw a relief rally in
the last couple of days as the acquisition of CIC Energy, which could have
strained its resources, fell through. Adani Power, our top pick, was the
standout performer, on the back of strong operating results and PLF data.
• AP-based gas capacities showed sharp PLF pick-up in May, on the
back of RIL-GAIL gas swap agreement. Eg: Lanco’s Kondapalli (79%
vs. 60% in 4Q), GVK’s Gautami (93% vs. 73%) and J1&2 (83% vs.
69%); GMR’s Vemagiri (99% vs. 75%) and Kakinada (80% vs. 63%).
The RIL-GAIL gas swap agreement, valid thru May, entailed RIL
diverting 2.6mmscmd of gas to AP (@ LNG prices), from Gujarat, in
exchange for equivalent LNG supplies (@ domestic gas prices) to the
latter. The objective was to meet power demand in deficit states like AP
which lacks connectivity to LNG terminals. On the other hand, NTPC's
gas-based plants saw just 58% PLF, vs 72% in FY11.
• Will there be more gas? JPM oil and gas analyst, Pradeep Mirchandani,
expects LNG imports to increase by 40-45% in FY12 vs. 32mmscmd in
FY11 – this would compensate for the 12mmscmd shortfall in KG-D6 gas
production (currently at ~48mmscmd). We spoke to GMR, and understand
1) that IPPs are keen that the gas-swap agreement should extend and 2) AP
govt. likely okay with higher resultant fuel cost for pass-through projects
(eg Vemagiri). RIL said at its AGM today that it would make vigorous
efforts to ramp up production. All these potential developments would
enhance fuel security for gas-based projects and favour GMR, GVK and
Lanco (which account for 2.4 out of 2.7GW of AP-based gas capacity).
• RPWR and JSW’s coal capacities reported weak PLFs while Adani
and NTPC numbers strong. Rosa and Vijaynagar operated at a decent
84% and 94% PLF in May, however saw lower than YTD levels. But
performance of JSW’s Ratnagiri and Barmer plants declined significantly.
Adani's Mundra operated at strong 87% and NTPC at >85%.
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