Adjusted PAT up 6.6%: NHPC’s reported revenue de-grew by 3.3% YoY, whereas
on adjusted basis, revenue was up by 1.7% in Q1FY13 at Rs14.2bn. Sales
included recoverable water cess of Rs2bn. While the reported PAT de-grew by
15.3% YoY, adjusted PAT was up by 6.6%. Incentives stood at Rs1.1bn in Q1FY13.
Generation was down YoY by 2.2% at 16.2bn. PAF for the quarter stood at 93.8%
as against 90.3% in Q1FY12.
Targets 1212MWs addition in FY13E: NHPC aims to convert Rs100bn of CWIP in
assets totalling to 1212MWs in FY13E. However, agitations at Uri and financial
crunch of HCC for TLDP 4 are taking the pace out of the execution. We are
expecting Uri and Chutak to commission only in FY13E. We expect partial COD of
Parbati 3 and full COD of Nimoo Bazgo and TLDP 3 in FY14E.
Debtors a cause of concern: NHPC’s debtor position of Rs21bn is a cause of
worry as nearly 40% of them are 60 days or older than that. Out of the troubled
debts, Delhi and UP constitute 50%, whereas Jharkhand and Orissa have 16%
share. The company has chalked out the liquidation plan where the sums will be
recovered in 10-12 instalments along with 15% interest. The company has been
able to liquidate Rs3.2bn from March 2012. Cash and equivalents are at Rs58bn.
Valuation and Recommendation: We have changed our estimates to factor in
the slow capacity addition and thus, the numbers would reflect the base case
scenario. Based on our estimates which factors in 822MWs of capacity addition
by FY14E, the stock is trading at a P/BV of 0.8x FY14E. Further, pass through of
water cess in the tariff and receivables from various SEBs will be the key
positives in the coming 3-4 months. We maintain ‘Accumulate’.
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