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Tax-adjusted Jun-q performance healthy. Tata Power reported PAT of
Rs4.19bn (up 34% YoY) well below our estimate of Rs6.06bn and
consensus estimate of Rs5.5bn. The bottom-line miss was led by high taxes
(Jun-q tax rate of ~50.2% vs. our est. of 30%), which included- (i) Rs550mn
of deferred tax provisions, (ii) 45% tax-rate in coal mines which accounted
for 56% of total segment PBIT in Jun-q
Strong operating performance driven by coal business and NDPL: Tata
Power reported consolidated EBITDA of Rs14.2bn (up 25% YoY), ~13%
ahead of estimates. Coal business reported EBITDA realization of
~US$53.6/MT up 39.5% YoY. Although mine production was practically
flat (15.5MMT up 1.4% YoY), revenue realization (gross of royalty exfreight)
of US$94/MT (up 30% YoY) was exceptionally strong. In Jun-q
other expenditure was higher by ~Rs2.28bn mainly on account of write-off
of under-ground mine development expenses by Arutmin so far, as in future
only open cast mining will be carried out there. EBITDA adjusted for this
one-time expense is even higher. NDPL reported EBITDA of Rs2.64bn (up
150% YoY) - strong results were driven by additional Rs1.22bn revenue
booked during the quarter post approval of certain past expenses in the
truing up exercise. The tariff order approval by DERC is awaited, excluding
one-off item in Jun-q, NDPL adjusted PAT of Rs260mn was down 54%
YoY.
Standalone EBIT (mainly Mumbai License Area) down 5% YoY to
Rs3.23bn. Despite this standalone PAT of Rs2.7bn was up marginally
(2.5%) owing to strong dividend income from coal mines (~Rs2.6bn in
1QFY12 vs. Rs1.26bn in Jun-q last year).
Mundra UMPP (4GW) - commissioning delays beyond TPWR's control.
Unit-1 (800MW) is ready for synchronization since end-June and is awaiting
transmission evacuation system which has been delayed to October (vs. Feb-
11 schedule) by PGCIL owing to delays related to securing right-of-way.
The company is lobbying with Ministry of Power to deal with potential Indo
coal fuel price shock which could severely dent UMPP project’s
profitability. Mundra UMPP currently contributes Rs71 or ~5% to our SOTP
valuation. The increase in fuel cost by $25/ton would erode this value
completely while decreasing FY13/14 consol. estimates by 7-8%.
Management is also evaluating the technical feasibility of blending low CV
imported coal without sacrificing efficiency.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tax-adjusted Jun-q performance healthy. Tata Power reported PAT of
Rs4.19bn (up 34% YoY) well below our estimate of Rs6.06bn and
consensus estimate of Rs5.5bn. The bottom-line miss was led by high taxes
(Jun-q tax rate of ~50.2% vs. our est. of 30%), which included- (i) Rs550mn
of deferred tax provisions, (ii) 45% tax-rate in coal mines which accounted
for 56% of total segment PBIT in Jun-q
Strong operating performance driven by coal business and NDPL: Tata
Power reported consolidated EBITDA of Rs14.2bn (up 25% YoY), ~13%
ahead of estimates. Coal business reported EBITDA realization of
~US$53.6/MT up 39.5% YoY. Although mine production was practically
flat (15.5MMT up 1.4% YoY), revenue realization (gross of royalty exfreight)
of US$94/MT (up 30% YoY) was exceptionally strong. In Jun-q
other expenditure was higher by ~Rs2.28bn mainly on account of write-off
of under-ground mine development expenses by Arutmin so far, as in future
only open cast mining will be carried out there. EBITDA adjusted for this
one-time expense is even higher. NDPL reported EBITDA of Rs2.64bn (up
150% YoY) - strong results were driven by additional Rs1.22bn revenue
booked during the quarter post approval of certain past expenses in the
truing up exercise. The tariff order approval by DERC is awaited, excluding
one-off item in Jun-q, NDPL adjusted PAT of Rs260mn was down 54%
YoY.
Standalone EBIT (mainly Mumbai License Area) down 5% YoY to
Rs3.23bn. Despite this standalone PAT of Rs2.7bn was up marginally
(2.5%) owing to strong dividend income from coal mines (~Rs2.6bn in
1QFY12 vs. Rs1.26bn in Jun-q last year).
Mundra UMPP (4GW) - commissioning delays beyond TPWR's control.
Unit-1 (800MW) is ready for synchronization since end-June and is awaiting
transmission evacuation system which has been delayed to October (vs. Feb-
11 schedule) by PGCIL owing to delays related to securing right-of-way.
The company is lobbying with Ministry of Power to deal with potential Indo
coal fuel price shock which could severely dent UMPP project’s
profitability. Mundra UMPP currently contributes Rs71 or ~5% to our SOTP
valuation. The increase in fuel cost by $25/ton would erode this value
completely while decreasing FY13/14 consol. estimates by 7-8%.
Management is also evaluating the technical feasibility of blending low CV
imported coal without sacrificing efficiency.
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