Jun 11, 2012, 01.36 PM | Source: Moneycontrol.com
Emkay Global Financial Services is bullish on Nava Bharat Ventures and has recommended accumulate rating on the stock with a target of Rs 204 in its June 04, 2012 research report.
, Emkay Global Financial Services |
“Nava Bharat Ventures, 4Q12 APAT stood at Rs671mn, up 3% yoy, above our estimates largely due to better performance in Power segment on realisations and cost front. Avg realization (ex-inter segment) stood at Rs4.8/unit, up by 28% qoq and 15% yoy. Avg generation cost has gone down by 13% sequentially; though up by 14% on yoy basis. Net generation declined by 24% yoy and remained flat qoq at 317MU. Reported net revenues in power segment grew by 41% on qoq basis due to additional revenue booked on price reset at year end prices for captive power sold during 9M12. Overall net revenues declined by 9% yoy to Rs2.4bn while EBITDA margins improved by 780bps yoy to 34.3%. Sugar business has also done well with ~13% of EBIT margins against loss in 4Q11 and 0.6% in 3Q12.”
“NBVL has started ferro chrome supply to TISCO from 3Q12. Average conversion price is around Rs27000/ton which includes power supply from Odisha plants at Rs4.8/unit. NBVL will supply 35000MT p.a. of Ferro chrome for 3 yrs under the contract. Zambia coal mines have started producing high grade coal. 64MW of under-construction plant in Odisha is expected to be commissioned by 1H12. We have revisited our assumptions for NBVL to account for better merchant realization with high degree of certainty (bilateral agreement with AP for surplus power from AP plants till May’13). Consequently our revised FY13E EPS stands at Rs30.3. We introduce FY14E earnings estimate at Rs33.7.”
“We expect power business continue to perform better in FY13 as well with offtake agreement already in place till May’13. Stock is currently trading at 5.7xFY13E EPS & 0.6xFY13E book. We do not see significant downside from these levels, upside though would only be triggered by (1) ramp up in Zambian mining & completion of 300MW and (2) 64MW COD and fuel availability for same. Maintain Accumulate with PT of Rs204,” says Emkay Global Financial Services research report.
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