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India Equity Research Reports, IPO and Stock News
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R o b u s t m a r g i n s …
Robust trading margins (4.9 paisa / unit), albeit lower than expected
volume (6726 MUs v/s expectation of 6966 MUs), robust other income
(26% growth YoY, annualised yield on 9.7% on standalone cash), higher
extra-ordinary expense (| 3 crore) were the key highlights of Q1FY12
result. Valuations are 1.2x at FY11 book value provide comfort. Reiterate
Buy with target price of |118 and rate it as our top pick in the power
sector. While the street is concerned is about long term PPA where delay
in capacity addition can impact volume (seems reasonable at this time),
timely execution of these projects could re rate the stock. While volatile
capital markets have dried up appetite of Power IPOs, monetisation of its
investments (Ind Bharat Power, Teesta Urja) is the key concern for the
stock.
Volumes rise 17% YoY, FY12 & FY13 to see traction in long term trading segment
Calculated trading margins for PTC in Q1 FY12 stood at 8.5 paisa/unit, but
adjusted for the rebates (| 23 crore), the core trading margins came in at
5.2 paisa/ unit. During the quarter, the company has sold 6726 MUs (+17
% YoY, +30% QoQ). Of these, Long term PPA units were 4200 MUs while
short term PPA was 2526 MUs. The other expenditure included | 1.3
crore payment to Mckinsey and | 1.7 crore for winding up PTC Ashmore
private equity fund. Average realisation for Q1 FY12 stood at | 3.7 /unit
vs. | 4.8/unit in Q1FY11.
Long term to show meaning full improvement in FY13
There will be marked change in the mix of volumes traded as significant
quantum of long term PPA will get traded as the tied power projects gets
commissioned in FY12 and FY13. The management expects ~1300 MW
of long term PPA’s to get commissioned and added to volumes in FY12
We estimate volumes to grow at CAGR of 50% over FY11-FY13E.
V a l u a t i o n
Valuations at 1.2x P/BV is attractive and have priced in almost all the
concerns realting to power sector. Though the stock might langiush till
the time more clarity merges on commnecement of long term PPA’s, SEB
finances and monetisation of its strategic investments but at the same
time offers attractive opportunity to enter. We therefore value the stock
on a SOTP basis and put target price of |120 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R o b u s t m a r g i n s …
Robust trading margins (4.9 paisa / unit), albeit lower than expected
volume (6726 MUs v/s expectation of 6966 MUs), robust other income
(26% growth YoY, annualised yield on 9.7% on standalone cash), higher
extra-ordinary expense (| 3 crore) were the key highlights of Q1FY12
result. Valuations are 1.2x at FY11 book value provide comfort. Reiterate
Buy with target price of |118 and rate it as our top pick in the power
sector. While the street is concerned is about long term PPA where delay
in capacity addition can impact volume (seems reasonable at this time),
timely execution of these projects could re rate the stock. While volatile
capital markets have dried up appetite of Power IPOs, monetisation of its
investments (Ind Bharat Power, Teesta Urja) is the key concern for the
stock.
Volumes rise 17% YoY, FY12 & FY13 to see traction in long term trading segment
Calculated trading margins for PTC in Q1 FY12 stood at 8.5 paisa/unit, but
adjusted for the rebates (| 23 crore), the core trading margins came in at
5.2 paisa/ unit. During the quarter, the company has sold 6726 MUs (+17
% YoY, +30% QoQ). Of these, Long term PPA units were 4200 MUs while
short term PPA was 2526 MUs. The other expenditure included | 1.3
crore payment to Mckinsey and | 1.7 crore for winding up PTC Ashmore
private equity fund. Average realisation for Q1 FY12 stood at | 3.7 /unit
vs. | 4.8/unit in Q1FY11.
Long term to show meaning full improvement in FY13
There will be marked change in the mix of volumes traded as significant
quantum of long term PPA will get traded as the tied power projects gets
commissioned in FY12 and FY13. The management expects ~1300 MW
of long term PPA’s to get commissioned and added to volumes in FY12
We estimate volumes to grow at CAGR of 50% over FY11-FY13E.
V a l u a t i o n
Valuations at 1.2x P/BV is attractive and have priced in almost all the
concerns realting to power sector. Though the stock might langiush till
the time more clarity merges on commnecement of long term PPA’s, SEB
finances and monetisation of its strategic investments but at the same
time offers attractive opportunity to enter. We therefore value the stock
on a SOTP basis and put target price of |120 per share.
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