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Adani Enterprises Ltd
Power Subsidiary Drove
Downside Surprise in F1Q12
Quick Comment: Strong numbers at EBITDA level,
but weaker than high expectations: EBITDA, at
Rs12.1bn (adjusted for a one-time provision of
Rs460mn for doubtful debts in the coal trading business),
while up a strong 41% YoY, was 21% below our
numbers. However, the negative surprise was
concentrated in the power business, which drove 90%+
of the downside to our estimates, with the port business
surprising marginally on the downside and the coal
trading business actually registering an upside surprise.
Adani Power was the key disappointment driver:
Adani Power missed our utilities analyst, Parag Gupta’s
estimates by 30% on revenue, 41% on EBITDA, and
54% on PAT. The disappointment was due to a
combination of lower gross generation, a shift in mix
from merchant to the PPA market, and higher fuel costs.
Parag remains Underweight on Adani Power (ADAN.BO,
Rs93.85), as he believes earnings could disappoint on
both lower power volumes (MSe for F2012 is 20.3bn
units vs. guidance of 19bn units) and higher coal costs.
Mundra – More of a intra-year shift: While Mundra
revenue came in 18% lower than we expected, leading
to a downside surprise of 5% on our EBITDA estimate, it
was led by traffic volumes, which grew 19% YoY to
15.1mn tons (11% lower than our estimate of 17mn
tons). With volume expected to pick up with the
commissioning of the new SPM (single point mooring)
and the UMPP in the second and third quarters,
respectively, we believe that there has just been an
intra-year shift in volumes at the asset. We continue to
expect 39% YoY growth in F2012 cargo (MSe at 71mn
tons vs. guidance of 100mn tons of traffic).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adani Enterprises Ltd
Power Subsidiary Drove
Downside Surprise in F1Q12
Quick Comment: Strong numbers at EBITDA level,
but weaker than high expectations: EBITDA, at
Rs12.1bn (adjusted for a one-time provision of
Rs460mn for doubtful debts in the coal trading business),
while up a strong 41% YoY, was 21% below our
numbers. However, the negative surprise was
concentrated in the power business, which drove 90%+
of the downside to our estimates, with the port business
surprising marginally on the downside and the coal
trading business actually registering an upside surprise.
Adani Power was the key disappointment driver:
Adani Power missed our utilities analyst, Parag Gupta’s
estimates by 30% on revenue, 41% on EBITDA, and
54% on PAT. The disappointment was due to a
combination of lower gross generation, a shift in mix
from merchant to the PPA market, and higher fuel costs.
Parag remains Underweight on Adani Power (ADAN.BO,
Rs93.85), as he believes earnings could disappoint on
both lower power volumes (MSe for F2012 is 20.3bn
units vs. guidance of 19bn units) and higher coal costs.
Mundra – More of a intra-year shift: While Mundra
revenue came in 18% lower than we expected, leading
to a downside surprise of 5% on our EBITDA estimate, it
was led by traffic volumes, which grew 19% YoY to
15.1mn tons (11% lower than our estimate of 17mn
tons). With volume expected to pick up with the
commissioning of the new SPM (single point mooring)
and the UMPP in the second and third quarters,
respectively, we believe that there has just been an
intra-year shift in volumes at the asset. We continue to
expect 39% YoY growth in F2012 cargo (MSe at 71mn
tons vs. guidance of 100mn tons of traffic).
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