Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adani Enterprises (ANIEF, Neutral)
Bear Case: What can go wrong
In the bear case, we cut our coal trading volume by 10% over FY13-14E,
leading to a 1% fall in FY13E volume. Further, we cut our coal trading margin
by US$1/tn ($8/tn now). We expect delay in capex by one year at coal mines
at Bunyu and Parsa Kente.
We factor in a 21% cut in EPS at its subsidiary MSEZ over FY13-14E and
39-64% at APL over FY12-14E and lower valuation by 24% to Rs126 of
MSEZ and 40% to Rs67 of APL.
Consequently, we expect 16-36% cut in our base case EPS leading to an
EPS CAGR of 25% over FY11-14E
We also removed MDO contracts starting after FY14E – Machhakata, Parsa
and Chendipada from our SOTP value. Further, we write off the investment
in Galilee coal mines in Australia and up the holdco discount to 50% for real
estate and 30% to other subsidiaries.
Base Case:
In the base case, we expect an EPS CAGR of 38% over FY11-14E.
In the base case, we expect the stock to trade at Rs595 per share translating
into 2.68x P/BV of FY13E.
Risk-Reward: Favorable but leverage risk exist
In the bear case, we expect the stock to trade at Rs327 per share translating
into 1.60x P/BV of FY13E.
In the base case, we expect the stock to trade at Rs595 per share translating
into 2.68x P/BV of FY13E.
Overall, the risk-reward appears favorable but leverage risk exists.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adani Enterprises (ANIEF, Neutral)
Bear Case: What can go wrong
In the bear case, we cut our coal trading volume by 10% over FY13-14E,
leading to a 1% fall in FY13E volume. Further, we cut our coal trading margin
by US$1/tn ($8/tn now). We expect delay in capex by one year at coal mines
at Bunyu and Parsa Kente.
We factor in a 21% cut in EPS at its subsidiary MSEZ over FY13-14E and
39-64% at APL over FY12-14E and lower valuation by 24% to Rs126 of
MSEZ and 40% to Rs67 of APL.
Consequently, we expect 16-36% cut in our base case EPS leading to an
EPS CAGR of 25% over FY11-14E
We also removed MDO contracts starting after FY14E – Machhakata, Parsa
and Chendipada from our SOTP value. Further, we write off the investment
in Galilee coal mines in Australia and up the holdco discount to 50% for real
estate and 30% to other subsidiaries.
Base Case:
In the base case, we expect an EPS CAGR of 38% over FY11-14E.
In the base case, we expect the stock to trade at Rs595 per share translating
into 2.68x P/BV of FY13E.
Risk-Reward: Favorable but leverage risk exist
In the bear case, we expect the stock to trade at Rs327 per share translating
into 1.60x P/BV of FY13E.
In the base case, we expect the stock to trade at Rs595 per share translating
into 2.68x P/BV of FY13E.
Overall, the risk-reward appears favorable but leverage risk exists.
No comments:
Post a Comment