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India Equity Research Reports, IPO and Stock News
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H i g h e r m e r c h a n t r a t e s le a d t o r o b u s t r e s u l t s
Robust top line (better than our and street estimates), higher merchant
realisation (| 4.7/kwhr), lower operating costs, higher interest
expenditure, robust other operating income (+65% QoQ) has led to PAT
of | 59.5 crore (well above our estimates and street estimates of | 18
crore). Increase in interest cost (+129% YoY) was on account of
commissioning of Karcham Wangtoo. The stock is expensive as
compared to NHPC on P/B basis. The full impact of Karcham Wangtoo
commissioning will be visible in FY13. Delay in capacity addition (on coal
based power plants), possibility of equity dilution to fund its investment in
power projects are the key risks to the stock. Maintain Buy with a revised
target price of | 50/ share.
ƒ Other highlights of the quarter
The company generated 1172 million units for the quarter (+75%
YoY,-59% QoQ). Average realisation for quarter stood at | 3.17/kwhr
(Sales realisation at 88% of generation). Average realisation from
Karcham Wangtoo project was | 4.7/kwhr. The company has VERs
worth | 29 crore during quarter. In FY12, the company expect ~|43
crore as sales from VERs. For FY14, the company expects to earn |
200 crore per annum from Karcham Wangtoo project.
V a l u a t i o n
At the CMP of | 45, the stock is trading at P/E of 31.1x and 16.6x on FY12E
and FY13E EPS, respectively. Similarly, on P/B multiple the stock is
trading at 2.1x and 1.6x FY13E, respectively. The execution capability of
parent company (JAL) renders significant comfort to upcoming expansion
plans. In FY13 and FY14 only 500 MW Bina Power Plant would be
commissioned which we believe is a blessing in disguise for the company
given the state of coal supplies for newly commissioned projects. We are
only taking projects commissioning by FY15 in our valuation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Click here for PDF LINK
H i g h e r m e r c h a n t r a t e s le a d t o r o b u s t r e s u l t s
Robust top line (better than our and street estimates), higher merchant
realisation (| 4.7/kwhr), lower operating costs, higher interest
expenditure, robust other operating income (+65% QoQ) has led to PAT
of | 59.5 crore (well above our estimates and street estimates of | 18
crore). Increase in interest cost (+129% YoY) was on account of
commissioning of Karcham Wangtoo. The stock is expensive as
compared to NHPC on P/B basis. The full impact of Karcham Wangtoo
commissioning will be visible in FY13. Delay in capacity addition (on coal
based power plants), possibility of equity dilution to fund its investment in
power projects are the key risks to the stock. Maintain Buy with a revised
target price of | 50/ share.
ƒ Other highlights of the quarter
The company generated 1172 million units for the quarter (+75%
YoY,-59% QoQ). Average realisation for quarter stood at | 3.17/kwhr
(Sales realisation at 88% of generation). Average realisation from
Karcham Wangtoo project was | 4.7/kwhr. The company has VERs
worth | 29 crore during quarter. In FY12, the company expect ~|43
crore as sales from VERs. For FY14, the company expects to earn |
200 crore per annum from Karcham Wangtoo project.
V a l u a t i o n
At the CMP of | 45, the stock is trading at P/E of 31.1x and 16.6x on FY12E
and FY13E EPS, respectively. Similarly, on P/B multiple the stock is
trading at 2.1x and 1.6x FY13E, respectively. The execution capability of
parent company (JAL) renders significant comfort to upcoming expansion
plans. In FY13 and FY14 only 500 MW Bina Power Plant would be
commissioned which we believe is a blessing in disguise for the company
given the state of coal supplies for newly commissioned projects. We are
only taking projects commissioning by FY15 in our valuation.
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