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Adani Enterprises (ADEL.BO)
2Q12 Results – A Mixed Bag
2Q12 Recurring PAT - 5% below CIRA — Despite a beat at the (1) sales level by 12%
and (2) EBITDA margin level by 30bps, ADE’s Recurring PAT at Rs5.9bn +5% YoY was
5% below CIRA at Rs6.2bn on account of higher-than-expected interest costs at
Rs4.1bn v/s CIRA at Rs2.1bn. The debt equity ratio ballooning up to 3.0x end 2Q12
from 1.9x end FY11 is concerning.
Coal Trading: Strong volumes - margins disappoint again — Volumes at 9.8m tons
were up 45% YoY (ahead of CIRA at 8.45m tons). But EBITDA margins at 7.5% were
below CIRA of 8.4%. To meet our FY12E volume assumption of 45m, ADE needs to do
25m tons in 2H12E, up 36% YoY, which we believe is very much achievable.
Adani Power: Recurring PAT 11% below CIRA — APL’s 2Q12 Recurring PAT at
Rs2.0bn (CIRA Rs2.3bn) was +59% YoY/ +13% QoQ. Net sales at 2959 mnkWh were
lower than CIRA at 3388 mnkWh on lower generation and high auxiliary consumption.
Merchant realizations were high at Rs4.70/kWh on account of sales to UPPCL.
Receivable days have moved up from 58 days to 74 days over the last year.
MPSEZ: Marginally ahead — PAT of Rs2.73bn, up 29% YoY and marginally ahead of
CIRA (Rs2.68bn). Revenues were 9% ahead of CIRA and were up 44% YoY. Although
EBITDA margins of 64.4% were weaker than expected (67.6%), the impact was offset
by higher-than-expected other operational income. MPSEZ registered a 34% YoY
cargo growth, largely driven by strong growth in coal (70% YoY) and liquid cargo (33%
YoY).Container growth in 2QFY12 was 17% YoY.
Target price cut to Rs522 — We lower EPS estimates by 14-31% over FY12E-15E to
factor in (1) -3% to +2% change in sales and (2) 238 to 372bps lower EBITDA margins.
We also cut our target price to Rs522 (from Rs568 earlier) to factor in our EPS revision
and (2) roll forward of all DCF values to Mar12E (Dec11E) and (3) roll forward of all
P/BV and EV/EBITDA multiples to Mar13E (Dec12E).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adani Enterprises (ADEL.BO)
2Q12 Results – A Mixed Bag
2Q12 Recurring PAT - 5% below CIRA — Despite a beat at the (1) sales level by 12%
and (2) EBITDA margin level by 30bps, ADE’s Recurring PAT at Rs5.9bn +5% YoY was
5% below CIRA at Rs6.2bn on account of higher-than-expected interest costs at
Rs4.1bn v/s CIRA at Rs2.1bn. The debt equity ratio ballooning up to 3.0x end 2Q12
from 1.9x end FY11 is concerning.
Coal Trading: Strong volumes - margins disappoint again — Volumes at 9.8m tons
were up 45% YoY (ahead of CIRA at 8.45m tons). But EBITDA margins at 7.5% were
below CIRA of 8.4%. To meet our FY12E volume assumption of 45m, ADE needs to do
25m tons in 2H12E, up 36% YoY, which we believe is very much achievable.
Adani Power: Recurring PAT 11% below CIRA — APL’s 2Q12 Recurring PAT at
Rs2.0bn (CIRA Rs2.3bn) was +59% YoY/ +13% QoQ. Net sales at 2959 mnkWh were
lower than CIRA at 3388 mnkWh on lower generation and high auxiliary consumption.
Merchant realizations were high at Rs4.70/kWh on account of sales to UPPCL.
Receivable days have moved up from 58 days to 74 days over the last year.
MPSEZ: Marginally ahead — PAT of Rs2.73bn, up 29% YoY and marginally ahead of
CIRA (Rs2.68bn). Revenues were 9% ahead of CIRA and were up 44% YoY. Although
EBITDA margins of 64.4% were weaker than expected (67.6%), the impact was offset
by higher-than-expected other operational income. MPSEZ registered a 34% YoY
cargo growth, largely driven by strong growth in coal (70% YoY) and liquid cargo (33%
YoY).Container growth in 2QFY12 was 17% YoY.
Target price cut to Rs522 — We lower EPS estimates by 14-31% over FY12E-15E to
factor in (1) -3% to +2% change in sales and (2) 238 to 372bps lower EBITDA margins.
We also cut our target price to Rs522 (from Rs568 earlier) to factor in our EPS revision
and (2) roll forward of all DCF values to Mar12E (Dec11E) and (3) roll forward of all
P/BV and EV/EBITDA multiples to Mar13E (Dec12E).
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