NHPC: Strong operating performance; Cut estimates on delay at Parbati-II; Maintain Buy
(NHPC IN, Mkt Cap USD4.7b, CMP INR30, TP INR37, 24% Upside, Buy)
NHPC’s 3QFY18 underlying PAT grew 40% YoY to INR2.7b (ahead of our estimate of INR2b), led by higher incentive income, lower other expenses, and saving in interest cost. Underlying PAT is adjusted for (a) dividend income of INR2.4b from NHDC and (b) late payment surcharge of INR2.3b (gross tax).
Kishanganga on track, Parbati-II delayed; cut estimates on delay; Maintain Buy
NHPC Limited is engaged in electricity generation. The Company is engaged in electric power generation by hydroelectric power plants. The Company is also engaged in contracts, project management and consultancy works. Its power stations include Bairasiul, Salal, Chamera-I, Tanakpur, Dhauliganga, Rangit and Loktak. Its focuses on Teesta Low Dam-IV Hydroelectric Project (160 megawatt), West Bengal; Kishanganga Hydroelectric Project (330 megawatt), Jammu and Kashmir; Parbati- II Hydroelectric Project (800 megawatt), Himachal Pradesh, and Subansiri Lower Hydroelectric Project (2,000 megawatt), Assam/Arunachal Pradesh. It provides consultancy services in various fields of hydropower, including river basin studies, survey works, design and engineering, geological studies, geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing, commissioning, and operation and maintenance.
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Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
NHPC (INITIATING COVERAGE): Come on in, the water’s fine; Valuations attractive at 1x BV and 6% dividend yield; initiate with Buy(NHPC IN, Mkt Cap USD4.7b, CMP INR30, TP INR37, 23% Upside, Buy)NHPC is India’s largest hydro power generator, with a 15% share. The company has an installed capacity of 6.6GW, with attributable equity share (AES) of 5.9GW (5.1GW at parent and 51% share in 1.52GW NHDC). NHPC has 3.1GW projects under construction, which are expected to raise AES in capacity by 53%. Regulated equity in its projects and operating efficiencies are the key drivers of earnings.Regulated e...
INFRASTRUCTURE AND PROJECT FINANCE CREDIT OPINION 29 November 2017 Update RATINGS NHPC Limited Domicile India Long Term Rating Baa2 Type LT Issuer Rating - Fgn Curr Outlook Stable Please see the ratings section at the end of this report for more information. The ratings and outlook shown reflect information as of the publication date. Contacts Gina Kim +65.6311.2612
UTILITIES: Seven things we learned at a conference on power distributionWe attended a conference on the power distribution sector organized by ‘Powerline’ on November 15-16, 2017. Our key takeaways:1. Dr Arun Kumar Verma, Joint Secretary, Ministry of Power highlighted increasing focus on strengthening distribution infrastructure, metering and improving financial health of DISCOMs.2. Distribution network is getting strengthened on improved central funding.3. Madhya Pradesh (MP), Maharashtra, Rajasthan and Andhra Pradesh (AP) have started supplying power round the clock. However, this has not b...
CESC: In-line results; Spencer’s sales weak, EBITDA positive; Demerger process on track; maintain Buy(CESC IN, Mkt Cap USD2.0b, CMP INR991, TP INR1360, 38% Upside, Buy)CESC's standalone PAT grew 2.1% YoY to INR2.47b, marginally below estimate. T&D loss (provisional) declined 100bp YoY (30bp QoQ) to 10.8%. Sales grew 4% YoY to 2.75BU. Realization was up 2.8% YoY to INR7.57/kWh. The tariff for FY18 is pending regulatory approval, delaying cost and capex recovery. However, this was offset by impressive reduction in T&D losses (drives incentive income) and power exports. Spencer - sales down, but...
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