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V a l u e p l a y ; c a p a c i t y a d d i t i o n a d a m p e n e r …
The company reported sales of | 882 crore much higher than our
estimate of | 666 crore. Sales included | 70.7 crore as water cess.
Adjusted sales came in at | 770 crore. Adjusted profit for the company in
Q2FY12 was | 265 crore vs. our estimate of | 255 crore. During the
quarter, the company generated 2892 million units (MUs) (down 11%
YoY, down 1% YoY). Sales realisation per unit stood at | 3.4/kwhr (net
unit sales taken at 88% of gross generation). At the CMP of | 20, the stock
is trading at an inexpensive valuation of 0.9x FY13 P/BV. Since lack of
capacity addition is the key overhang for the company, our earnings have
factored no capacity addition in FY12 and ~ 822 MW in FY13 (these
include 515 MW that slipped in FY12). We maintain our BUY rating with a
target price of | 28. However, investors will have to be patient enough for
earning meaningful returns on the stock.
ƒ Other key highlights for the quarter
In Q3FY12, other expenditure included | 80 crore incurred for the
Kotli Bhel project (which is yet to receive environment clearance)
and | 20 crore towards relocation expenses. Other income for the
quarter came in at | 203 crore (up 12% QoQ, 22% YoY). Of these,
| 31 crore was towards interest from beneficiary states, which has
risen on finalisation of tariff.
V a l u a t i o n
At the CMP of | 20, the stock is trading at P/E of 11.1x and 9.5x on FY12E
and FY13E EPS, respectively. Similarly, on P/BV multiples, the stock is
trading at 1.0x and 0.9x FY12E and FY13E, respectively. We maintain our
BUY rating on the stock with a target price of | 28. NHPC has least fuel
risk in an environment where fuel security can materially impact earnings
and valuation of power utilities.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
V a l u e p l a y ; c a p a c i t y a d d i t i o n a d a m p e n e r …
The company reported sales of | 882 crore much higher than our
estimate of | 666 crore. Sales included | 70.7 crore as water cess.
Adjusted sales came in at | 770 crore. Adjusted profit for the company in
Q2FY12 was | 265 crore vs. our estimate of | 255 crore. During the
quarter, the company generated 2892 million units (MUs) (down 11%
YoY, down 1% YoY). Sales realisation per unit stood at | 3.4/kwhr (net
unit sales taken at 88% of gross generation). At the CMP of | 20, the stock
is trading at an inexpensive valuation of 0.9x FY13 P/BV. Since lack of
capacity addition is the key overhang for the company, our earnings have
factored no capacity addition in FY12 and ~ 822 MW in FY13 (these
include 515 MW that slipped in FY12). We maintain our BUY rating with a
target price of | 28. However, investors will have to be patient enough for
earning meaningful returns on the stock.
ƒ Other key highlights for the quarter
In Q3FY12, other expenditure included | 80 crore incurred for the
Kotli Bhel project (which is yet to receive environment clearance)
and | 20 crore towards relocation expenses. Other income for the
quarter came in at | 203 crore (up 12% QoQ, 22% YoY). Of these,
| 31 crore was towards interest from beneficiary states, which has
risen on finalisation of tariff.
V a l u a t i o n
At the CMP of | 20, the stock is trading at P/E of 11.1x and 9.5x on FY12E
and FY13E EPS, respectively. Similarly, on P/BV multiples, the stock is
trading at 1.0x and 0.9x FY12E and FY13E, respectively. We maintain our
BUY rating on the stock with a target price of | 28. NHPC has least fuel
risk in an environment where fuel security can materially impact earnings
and valuation of power utilities.
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