Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Going "Super" Critical
§ 18% of our estimated FY12 capacity addition target for NTPC met
§ We expect completion of 500MW Simhadri U-3 next month
§ Next round of capacity additions by end-October
§ Reiterate BUY with DCF-based TP of INR204
Event
Yesterday (28 June), NTPC announced
the commissioning of its 660MW U-1
Sipat power plant. This unit was initially
commissioned in March but was taken out
of operation because of a technical snag,
which has subsequently been resolved.
The plant will declare the achievement of
Commercial Operations Date (COD)
within a month. Recall that we are
modelling in a capacity addition of
3,570MW for FY12 and with the
commissioning of Sipat U-1, about 18% of
our capacity addition target for NTPC has been met. NTPC’s total power
generation capacity is currently 31.7GW including proportionate share of
capacity in JVs. The company is gunning for a capacity addition target of
4,480MW at the consolidated level.
Comment
With Sipat U-1 completed, we look forward to completion of the 500MW
Simhadri U-3 power plant next month. Although we expect Farakka U-6
to also be completed, we are building in low utilisation for this plant as the
site faces a chronic shortage because of the delay in start-up of the
linked coal mines and logistical constraints in getting coal from alternate
sources. After Simhardri U-3, we expect the next round of capacity
additions by end-October – 500 MW Simhadri U-4 and 500MW U-1 at
Vallur (50% stake).
Reiterate BUY; NTPC is our top pick
We reiterate our BUY rating on NTPC with a DCF-based TP of INR204.
Our DCF is based on a WACC of 11.4% using a cost of equity of 13.1%,
cost of debt of 8%, tax rate of 30% and a D/E ratio of 31%. The stock is
trading on an FY13E P/BV of 1.9x – a discount to its seven-year historical
median NTM P/BV. With undemanding valuations, assured fuel supplies
(as elaborated in our last note, Shock Absorber, 17 June 2011) and
assured return, NTPC is now our top pick in our coverage universe. Key
risks to our TP remain execution delays in power projects and coal
shortages leading to lower utilisation rates for NTPC’s power plants
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Going "Super" Critical
§ 18% of our estimated FY12 capacity addition target for NTPC met
§ We expect completion of 500MW Simhadri U-3 next month
§ Next round of capacity additions by end-October
§ Reiterate BUY with DCF-based TP of INR204
Event
Yesterday (28 June), NTPC announced
the commissioning of its 660MW U-1
Sipat power plant. This unit was initially
commissioned in March but was taken out
of operation because of a technical snag,
which has subsequently been resolved.
The plant will declare the achievement of
Commercial Operations Date (COD)
within a month. Recall that we are
modelling in a capacity addition of
3,570MW for FY12 and with the
commissioning of Sipat U-1, about 18% of
our capacity addition target for NTPC has been met. NTPC’s total power
generation capacity is currently 31.7GW including proportionate share of
capacity in JVs. The company is gunning for a capacity addition target of
4,480MW at the consolidated level.
Comment
With Sipat U-1 completed, we look forward to completion of the 500MW
Simhadri U-3 power plant next month. Although we expect Farakka U-6
to also be completed, we are building in low utilisation for this plant as the
site faces a chronic shortage because of the delay in start-up of the
linked coal mines and logistical constraints in getting coal from alternate
sources. After Simhardri U-3, we expect the next round of capacity
additions by end-October – 500 MW Simhadri U-4 and 500MW U-1 at
Vallur (50% stake).
Reiterate BUY; NTPC is our top pick
We reiterate our BUY rating on NTPC with a DCF-based TP of INR204.
Our DCF is based on a WACC of 11.4% using a cost of equity of 13.1%,
cost of debt of 8%, tax rate of 30% and a D/E ratio of 31%. The stock is
trading on an FY13E P/BV of 1.9x – a discount to its seven-year historical
median NTM P/BV. With undemanding valuations, assured fuel supplies
(as elaborated in our last note, Shock Absorber, 17 June 2011) and
assured return, NTPC is now our top pick in our coverage universe. Key
risks to our TP remain execution delays in power projects and coal
shortages leading to lower utilisation rates for NTPC’s power plants
No comments:
Post a Comment