Adani Power Same story; cut earnings/TP; Maintain Reduce :Emkay

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Adani Power

Same story; cut earnings/TP; Maintain Reduce

REDUCE

CMP: Rs78                                        Target Price: Rs72

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n     2Q PAT of Rs1.8bn is below expectation of Rs2.7bn due to (1) Rs0.8bn of extraordinary items (forex loss, receivable recovery) and (2) fuel cost (past forex adjusted) higher at Rs1.26/unit. Adjusted PAT stood at Rs2.1bn.

n     Aggressive accounting continued in this qtr - 1) not provided MAT (supposed to provide) and 2) recognized SEZ duty (Rs213mn) as revenues. 

n     Reiterate earnings downgrade through out FY12E; after 2Q12 its 23%/22% for FY12E/13E - driven by higher fuel cost and one-two month delay in capacities

n     Foresee further downgrades due to - (1) fuel cost assumed at Rs1.14/unit (2Q - 1.26), (2) Indonesian regulations impact & (3) operating parameters (aux, heat rate & PLF); Maintain Reduce; Cut TP to Rs72