Accumulate NHPC; target of Rs 19: PLilladher

Prabhudas Lilladher is bullish on NHPC and has recommended accumulate rating on the stock with a target of Rs 19 in its August 07, 2012 research report.

“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.”

“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. 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.”

“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’,” says Prabhudas Lilladher research report. 

Public holding more than 90% in Indian cos

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