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● We expect Adani Power and JPVL’s recurring PAT to grow 69%
YoY and 196% YoY respectively led by commissioning of new
capacities (2x YoY for Adani Power and 2.4x YoY for JPVL).
However, despite capacity doubling for Reliance Power as well, its
PAT is expected to decline 32% YoY due to lower other income.
● KSK’s profitability is expected to decline 88% YoY due to higher
fuel costs at Wardha Warora project. Lanco is expected to report
loss of Rs391 mn at recurring PAT level due to losses at Griffin,
higher construction revenue elimination and higher interest costs.
● NHPC’s recurring PAT is expected to remain flat YoY. We expect
NTPC’s recurring PAT to decline 2% YoY, however, lower-thanexpected
plant availability (PAF) could trigger a negative surprise.
Tata Power’s recurring PAT is expected to increase 25% YoY.
● Sharp INR depreciation (9.6% QoQ) in 2Q12 is expected to result
in MTM forex loss of Rs2.6 bn for Lanco (leading to reported loss
of Rs3bn) and Rs5.3bn for Tata Power (leading to reported loss of
Rs282 mn). But, Tata Power is evaluating a change in accounting
policy which may mean that it wouldn’t report forex loss in 2Q12.
Adani Power
We expect revenues and recurring PAT to grow 126% YoY and 69%
YoY respectively led by doubling of capacity to 1.98 GW. However,
growth could have been even higher but for: (1) planned maintenance
shutdowns taken at units 3 & 4 (330MW each) of Mundra-I & II project
resulting in lower PLF of 76%, and (2) UP SEB procuring only 0.48GW
out of 0.6GW contracted for one year (w.e.f Jul-11). Further, if Adani
Power does not pay MAT tax imposed on SEZ projects (issue under
litigation), our recurring PAT estimate could see upside of Rs545 mn.
Jaiprakash Power (JPVL)
Recurring PAT is expected to grow 196% YoY due to merger of 1GW
Karcham Wangtoo project in standalone business (w.e.f. 1Q12) and
increase in total capacity to 1.7GW post the commissioning of 0.5GW
of Karcham Wangtoo in Sep-11. Almost all the power from the project
was sold through power exchanges in 2Q12 and we expect its
realization at Rs3.0/kWh in line with merchant tariffs for the period.
KSK
Despite 70% YoY revenue growth led by commissioning of entire
0.54GW Wardha Warora project and sale of 0.3GW from the project
to Reliance Infra at an attractive tariff of Rs5.4/kWh, we expect KSK’s
recurring PAT to decline 88% YoY led by higher fuel costs (Wardha
Warora still buying e-auction coal pending supplies from Coal India),
lower PLF (56%) at Wardha Warora and no material project
development fees expected to be earned during 2Q12.
Lanco
We expect Lanco to report loss of Rs391 mn at a recurring PAT level
led by: (1) EBIT loss of Rs750 mn at Griffin, (2) increase in elimination
of construction revenues (higher share of subsidiary projects being
executed), (3) higher fuel costs at Amarkantak-I & II and, (4) sharp
rise in interest costs. Further, 9.6% QoQ depreciation of INR vs USD
during 2Q12 is expected to result in MTM forex loss of Rs2.6 bn on
unhedged foreign exposure resulting in a reported loss of Rs2.97 bn.
NHPC and NTPC
We expect NHPC’s sales to grow 7% YoY led by 9% YoY rise in tariff
realisation. Recurring PAT is expected to remain flat YoY. For NTPC,
despite 2.6GW capacity addition over the past year, we expect muted
sales growth of 5% YoY due to 3% YoY decline in generation (lower
PLF due to recent coal supply issues). Lower availability (PAF) could
result in negative surprise to our recurring PAT estimate of Rs18.2 bn.
Reliance Power
We expect a strong 179% YoY sales growth led by doubling of
capacity at Rosa-I project to 0.6GW. However, we expect recurring
PAT to fall 32% YoY led by 60% YoY fall in other income as cash
surplus is depleting on it being deployed towards projects under
construction. Rosa-I is expected to earn an RoE of 9.8% in 2Q12 (vs
10.8% in 1Q12) as it operated at 76% PLF in 2Q12 (vs 91% in 1Q12).
Tata Power
Recurring PAT is expected to grow 25% YoY led by a rise in earnings
from Mumbai’s licence area operations, and higher profitability in
Indonesian coal business. Due to the sharp INR depreciation in 2Q12,
Tata Power could report MTM forex loss of Rs5.3 bn resulting in
reported loss of Rs282 mn. However, the company is evaluating a
change in its accounting policy which would imply it would report forex
profit/loss in P&L yearly rather than quarterly.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● We expect Adani Power and JPVL’s recurring PAT to grow 69%
YoY and 196% YoY respectively led by commissioning of new
capacities (2x YoY for Adani Power and 2.4x YoY for JPVL).
However, despite capacity doubling for Reliance Power as well, its
PAT is expected to decline 32% YoY due to lower other income.
● KSK’s profitability is expected to decline 88% YoY due to higher
fuel costs at Wardha Warora project. Lanco is expected to report
loss of Rs391 mn at recurring PAT level due to losses at Griffin,
higher construction revenue elimination and higher interest costs.
● NHPC’s recurring PAT is expected to remain flat YoY. We expect
NTPC’s recurring PAT to decline 2% YoY, however, lower-thanexpected
plant availability (PAF) could trigger a negative surprise.
Tata Power’s recurring PAT is expected to increase 25% YoY.
● Sharp INR depreciation (9.6% QoQ) in 2Q12 is expected to result
in MTM forex loss of Rs2.6 bn for Lanco (leading to reported loss
of Rs3bn) and Rs5.3bn for Tata Power (leading to reported loss of
Rs282 mn). But, Tata Power is evaluating a change in accounting
policy which may mean that it wouldn’t report forex loss in 2Q12.
Adani Power
We expect revenues and recurring PAT to grow 126% YoY and 69%
YoY respectively led by doubling of capacity to 1.98 GW. However,
growth could have been even higher but for: (1) planned maintenance
shutdowns taken at units 3 & 4 (330MW each) of Mundra-I & II project
resulting in lower PLF of 76%, and (2) UP SEB procuring only 0.48GW
out of 0.6GW contracted for one year (w.e.f Jul-11). Further, if Adani
Power does not pay MAT tax imposed on SEZ projects (issue under
litigation), our recurring PAT estimate could see upside of Rs545 mn.
Jaiprakash Power (JPVL)
Recurring PAT is expected to grow 196% YoY due to merger of 1GW
Karcham Wangtoo project in standalone business (w.e.f. 1Q12) and
increase in total capacity to 1.7GW post the commissioning of 0.5GW
of Karcham Wangtoo in Sep-11. Almost all the power from the project
was sold through power exchanges in 2Q12 and we expect its
realization at Rs3.0/kWh in line with merchant tariffs for the period.
KSK
Despite 70% YoY revenue growth led by commissioning of entire
0.54GW Wardha Warora project and sale of 0.3GW from the project
to Reliance Infra at an attractive tariff of Rs5.4/kWh, we expect KSK’s
recurring PAT to decline 88% YoY led by higher fuel costs (Wardha
Warora still buying e-auction coal pending supplies from Coal India),
lower PLF (56%) at Wardha Warora and no material project
development fees expected to be earned during 2Q12.
Lanco
We expect Lanco to report loss of Rs391 mn at a recurring PAT level
led by: (1) EBIT loss of Rs750 mn at Griffin, (2) increase in elimination
of construction revenues (higher share of subsidiary projects being
executed), (3) higher fuel costs at Amarkantak-I & II and, (4) sharp
rise in interest costs. Further, 9.6% QoQ depreciation of INR vs USD
during 2Q12 is expected to result in MTM forex loss of Rs2.6 bn on
unhedged foreign exposure resulting in a reported loss of Rs2.97 bn.
NHPC and NTPC
We expect NHPC’s sales to grow 7% YoY led by 9% YoY rise in tariff
realisation. Recurring PAT is expected to remain flat YoY. For NTPC,
despite 2.6GW capacity addition over the past year, we expect muted
sales growth of 5% YoY due to 3% YoY decline in generation (lower
PLF due to recent coal supply issues). Lower availability (PAF) could
result in negative surprise to our recurring PAT estimate of Rs18.2 bn.
Reliance Power
We expect a strong 179% YoY sales growth led by doubling of
capacity at Rosa-I project to 0.6GW. However, we expect recurring
PAT to fall 32% YoY led by 60% YoY fall in other income as cash
surplus is depleting on it being deployed towards projects under
construction. Rosa-I is expected to earn an RoE of 9.8% in 2Q12 (vs
10.8% in 1Q12) as it operated at 76% PLF in 2Q12 (vs 91% in 1Q12).
Tata Power
Recurring PAT is expected to grow 25% YoY led by a rise in earnings
from Mumbai’s licence area operations, and higher profitability in
Indonesian coal business. Due to the sharp INR depreciation in 2Q12,
Tata Power could report MTM forex loss of Rs5.3 bn resulting in
reported loss of Rs282 mn. However, the company is evaluating a
change in its accounting policy which would imply it would report forex
profit/loss in P&L yearly rather than quarterly.
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