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Adani Power (ADAN.BO)
Research Tactical Idea
We believe the share price will fall relative to the country index over the next 15 days.
The company is due to announce its F1Q12 results tomorrow and we expect them to be weaker than our estimate as
power generation during the quarter was about 12% lower than our estimate based on CEA data. The key reason for the
weak generation is lower PLF in June, which was only 51.7% as against 90.5% in April and 88% in May. We believe the
key reasons for lower PLF were shutdown of Unit 1 of Mundra I & II for scheduled maintenance and possibly lower
demand in the merchant market due to early onset of monsoon. Based on the lower generation number and keeping
everything else constant, there could be about 13% downside to our F1Q12 EBITDA estimate of Rs 7bn and 19%
downside to our profit estimate of Rs 3.8 bn.
We estimate that there is about a 60% to 70% or "likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Underweight
Industry View: Cautious
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adani Power (ADAN.BO)
Research Tactical Idea
We believe the share price will fall relative to the country index over the next 15 days.
The company is due to announce its F1Q12 results tomorrow and we expect them to be weaker than our estimate as
power generation during the quarter was about 12% lower than our estimate based on CEA data. The key reason for the
weak generation is lower PLF in June, which was only 51.7% as against 90.5% in April and 88% in May. We believe the
key reasons for lower PLF were shutdown of Unit 1 of Mundra I & II for scheduled maintenance and possibly lower
demand in the merchant market due to early onset of monsoon. Based on the lower generation number and keeping
everything else constant, there could be about 13% downside to our F1Q12 EBITDA estimate of Rs 7bn and 19%
downside to our profit estimate of Rs 3.8 bn.
We estimate that there is about a 60% to 70% or "likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Underweight
Industry View: Cautious
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