Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Karcham Wangtoo (KW) drives PAT growth. JPVL reported 1Q PAT of
Rs696mn, ~15% ahead of consensus. Reported PAT implies growth of ~81%
YoY; after adjusting 1QFY11 for one-off prior period item (~Rs100mn),
growth is 44%. While results appear to be well ahead of consensus, we were
factoring in sale of ~249MU from KW in Jun-q (as per CEA data) at short term
rates (@Rs3.9/Kwh based on our discussion with management). At operating
level reported EBITDA of Rs2.55bn (up 43% YoY) was in-line with our est. of
Rs2.6bn. The amalgamation of KW (earlier 57% subsidiary) and Bina (100%
sub) into parent company has received legal sanction during the quarter; our
FY12 consol. estimates were already factoring this eventuality (no minority
interest factored for KW in current fiscal). It was business as usual for balance
operating regulated return hydro capacity (700MW).
KW execution broadly on track, but PPA uncertainty remains: 2 units of
250MW commenced commercial operations in Jun-q (unit-I 26th May onwards,
unit-2 starting 23rd Jun). As per notes to accounts, is under test run and will be
commissioned shortly. Balance two units are expected to achieve CoD in Sep-q
(vs. our est. of end-Aug-11). Pending verdict on under litigation PPA with PTC,
JPVL has been selling KW generation in ST market (~80% bilateral with PTC,
and 20% on power exchanges). While the current arrangement is working to
JPVL’s benefit, near-term PPA uncertainties remain. In base case, we assume
the revised project cost (Rs71.5bn, ~21% higher than original) is approved and
PPA: merchant is 80:20. Downside arises from disapproval of cost escalation,
while upside could arise if the company succeeds in carving out a higher
merchant component while renegotiating the PPA.
Execution uncertainty at Karchana. Press reports indicate that land
acquisition issues severely impede visibility on execution (see Karchana Power
project in limbo? sourced from HT). Our SOP conservatively factors
~Rs1/share for 2x660MW of Karchana.
Maintain Neutral. Positive surprise for consensus post Jun-q results may lead
to short term rebound. We maintain estimates and Mar-12 SOP PT of
Rs46/share pending clarity on project execution, progress on Karcham PPA and
funding plans from management. Key upside risk- improvement in linkage coal
visibility; downside- unfavorable PPA outcome on KW.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Karcham Wangtoo (KW) drives PAT growth. JPVL reported 1Q PAT of
Rs696mn, ~15% ahead of consensus. Reported PAT implies growth of ~81%
YoY; after adjusting 1QFY11 for one-off prior period item (~Rs100mn),
growth is 44%. While results appear to be well ahead of consensus, we were
factoring in sale of ~249MU from KW in Jun-q (as per CEA data) at short term
rates (@Rs3.9/Kwh based on our discussion with management). At operating
level reported EBITDA of Rs2.55bn (up 43% YoY) was in-line with our est. of
Rs2.6bn. The amalgamation of KW (earlier 57% subsidiary) and Bina (100%
sub) into parent company has received legal sanction during the quarter; our
FY12 consol. estimates were already factoring this eventuality (no minority
interest factored for KW in current fiscal). It was business as usual for balance
operating regulated return hydro capacity (700MW).
KW execution broadly on track, but PPA uncertainty remains: 2 units of
250MW commenced commercial operations in Jun-q (unit-I 26th May onwards,
unit-2 starting 23rd Jun). As per notes to accounts, is under test run and will be
commissioned shortly. Balance two units are expected to achieve CoD in Sep-q
(vs. our est. of end-Aug-11). Pending verdict on under litigation PPA with PTC,
JPVL has been selling KW generation in ST market (~80% bilateral with PTC,
and 20% on power exchanges). While the current arrangement is working to
JPVL’s benefit, near-term PPA uncertainties remain. In base case, we assume
the revised project cost (Rs71.5bn, ~21% higher than original) is approved and
PPA: merchant is 80:20. Downside arises from disapproval of cost escalation,
while upside could arise if the company succeeds in carving out a higher
merchant component while renegotiating the PPA.
Execution uncertainty at Karchana. Press reports indicate that land
acquisition issues severely impede visibility on execution (see Karchana Power
project in limbo? sourced from HT). Our SOP conservatively factors
~Rs1/share for 2x660MW of Karchana.
Maintain Neutral. Positive surprise for consensus post Jun-q results may lead
to short term rebound. We maintain estimates and Mar-12 SOP PT of
Rs46/share pending clarity on project execution, progress on Karcham PPA and
funding plans from management. Key upside risk- improvement in linkage coal
visibility; downside- unfavorable PPA outcome on KW.
No comments:
Post a Comment