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India Equity Research Reports, IPO and Stock News
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We expect operational inefficiencies (lower generation and realizations) to weigh on earnings in F2Q12, as was the case in 1Q. While Adani Power, JSW Energy and Lanco may disappoint, Jindal Power may beat our estimate.
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Adani Power – lower generation and possibly lower merchant realizations: Adani Power generated 3.3 bn units in F2Q12 (as per CEA data) vs. our estimate of 3.8 bn units – a 13% miss. All else remaining constant, this could result in a 20% disappointment on earnings. Also, we expect average merchant realizations to be at least 7% lower than our estimate (due to lower sales to UP and delay in signing of 1-year contract with MSEDCL), affecting earnings by a further 7%. Hence, earnings could be 25% lower than our estimate, though that would be close to consensus estimate.
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Tata Power – high tax rate and interest cost surprised negatively in F1Q12. It will be important to see the impact of these items in the consolidated numbers of F2Q12 as well.
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Jindal Power – generation is 6% higher than our estimate and hence, overall numbers for Tamnar I could beat our earnings estimate of Rs4.4 bn.
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Rupee depreciation could cause JSW Energy (high exposure to imported spot coal) and Lanco (about US$ 500 mn of forex debt taken to fund Griffin acquisition) to disappoint on earnings.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
•
We expect operational inefficiencies (lower generation and realizations) to weigh on earnings in F2Q12, as was the case in 1Q. While Adani Power, JSW Energy and Lanco may disappoint, Jindal Power may beat our estimate.
•
Adani Power – lower generation and possibly lower merchant realizations: Adani Power generated 3.3 bn units in F2Q12 (as per CEA data) vs. our estimate of 3.8 bn units – a 13% miss. All else remaining constant, this could result in a 20% disappointment on earnings. Also, we expect average merchant realizations to be at least 7% lower than our estimate (due to lower sales to UP and delay in signing of 1-year contract with MSEDCL), affecting earnings by a further 7%. Hence, earnings could be 25% lower than our estimate, though that would be close to consensus estimate.
•
Tata Power – high tax rate and interest cost surprised negatively in F1Q12. It will be important to see the impact of these items in the consolidated numbers of F2Q12 as well.
•
Jindal Power – generation is 6% higher than our estimate and hence, overall numbers for Tamnar I could beat our earnings estimate of Rs4.4 bn.
•
Rupee depreciation could cause JSW Energy (high exposure to imported spot coal) and Lanco (about US$ 500 mn of forex debt taken to fund Griffin acquisition) to disappoint on earnings.
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