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Adjusted sales flat YoY: Revenues from operations at Rs7.7bn (PLe: Rs7bn) for
Q3FY11, flat YoY, was on account of underutilisation of operating capacities,
with generation down by 5.8% YoY. The company has included items in
revenues to the tune of Rs1.1bn, mainly arising out of water cess billing and
recovery of tariffs and interest on that amount. Expenditure also had major
extraordinary items of Rs800m pertaining to provisions created for Kotli Bhel
Stage-1&2 projects, as these projects have less chances of getting approved by
MOEF.
Adjusted PAT up 16.8%: Adjusted PAT stands at Rs2.6bn (PLe: Rs2.4bn) as
against reported PAT of Rs2.1bn (grossed up at MAT rate).
Fails to reach the target of 500MWs commissioning in FY12E: NHPC’s Chutak
HEP Unit 1 will now get commissioned by March 2012 instead of November
2011, mainly due to bad weather conditions. Chamera and Uri 2 will now get
now commissioned by June 2013 instead of March 2012, mainly due to nonavailability
of load from Discoms and bad weather conditions. The company has
plans to add close to 822MWs in FY13E. Cash stands at Rs40bn. Regulated
equity stands at Rs71bn. Also, the company will take a hit on P/L as Parbati 2 is
delayed which will affect the COD of Parbati 3. NHPC will book the capitalisation
cost from FY13E on Parbati 3, whereas the tariffs will be booked when the full
plant achieves COD in FY16E.
Valuation and Recommendation: NHPC currently has been lagging behind in
terms of capacity addition which will lead to a flat generation growth in FY12E.
We have changed our estimates to factor in capacity delays and adverse effect
of Parbati 3 capitalisation into FY13E and beyond numbers. We have, thus,
reduced our target price and believe that the stock is fairly priced with negative
bias. The stock is trading at a P/BV of 0.9x FY13E/14E. We maintain
‘Accumulate’ just because it is the safest play (non-fossil fuel) in the Power
Sector, but lower our target price from Rs24.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adjusted sales flat YoY: Revenues from operations at Rs7.7bn (PLe: Rs7bn) for
Q3FY11, flat YoY, was on account of underutilisation of operating capacities,
with generation down by 5.8% YoY. The company has included items in
revenues to the tune of Rs1.1bn, mainly arising out of water cess billing and
recovery of tariffs and interest on that amount. Expenditure also had major
extraordinary items of Rs800m pertaining to provisions created for Kotli Bhel
Stage-1&2 projects, as these projects have less chances of getting approved by
MOEF.
Adjusted PAT up 16.8%: Adjusted PAT stands at Rs2.6bn (PLe: Rs2.4bn) as
against reported PAT of Rs2.1bn (grossed up at MAT rate).
Fails to reach the target of 500MWs commissioning in FY12E: NHPC’s Chutak
HEP Unit 1 will now get commissioned by March 2012 instead of November
2011, mainly due to bad weather conditions. Chamera and Uri 2 will now get
now commissioned by June 2013 instead of March 2012, mainly due to nonavailability
of load from Discoms and bad weather conditions. The company has
plans to add close to 822MWs in FY13E. Cash stands at Rs40bn. Regulated
equity stands at Rs71bn. Also, the company will take a hit on P/L as Parbati 2 is
delayed which will affect the COD of Parbati 3. NHPC will book the capitalisation
cost from FY13E on Parbati 3, whereas the tariffs will be booked when the full
plant achieves COD in FY16E.
Valuation and Recommendation: NHPC currently has been lagging behind in
terms of capacity addition which will lead to a flat generation growth in FY12E.
We have changed our estimates to factor in capacity delays and adverse effect
of Parbati 3 capitalisation into FY13E and beyond numbers. We have, thus,
reduced our target price and believe that the stock is fairly priced with negative
bias. The stock is trading at a P/BV of 0.9x FY13E/14E. We maintain
‘Accumulate’ just because it is the safest play (non-fossil fuel) in the Power
Sector, but lower our target price from Rs24.
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