Emkay Global Financial Services has recommended hold rating on Jaiprakash Power Ventures with a target of Rs 45, in its June 4, 2012 research report.
"JPVL’s 4Q12 performance was below our estimates with the quarter slipped into losses marginally at PAT level. Reported loss stood at Rs 68 mn against our expectation of profit. The quarter was primarily impacted by (i) lower generation, (ii) lower VER revenues (only Rs 9mn vs Rs 66mn in 4Q11) and (iii) higher interest expenses (up 145% yoy). Net revenues for 4Q12 and FY12 reported at Rs 2.9bn and Rs 15.8bn, up 98% and 125% respectively on YoY basis. EBITDA margins had declined by 14bps yoy to 90%."
"We did some fine tuning of our FY13 estimates to align with FY12 operational performance. Consequently our revised FY13E EPS stands at Rs 3/share vs earlier estimate of Rs3.1/share. We also introduce FY14E earnings of Rs4.8/share. FY14E earnings will be driven by income from carbon credits accruing at Karcham, commissioning of Nigrie and first full year operation of Bina-I."
"Many of the issues faced by JPVL have been addressed like (1) under development projects put on hold (Karchana, Lower Siyang etc) resulting into limited funding needs, and (2) healthy internal accruals from Karcham which will aid cash flows. However we would like to wait for further clarity over 1) funding for NCD bullet payment which is due in Feb 2013, 2) forest clearance for Dongri Tal II mine and 3) use of excess captive coal for Bina. There is also a risk of HP levying water cess which could impact Karcham’s profitability. However, as of now there is no indication/proposal. We retain our Hold rating on the stock with target price of Rs 45," says Emkay Global Financial Services research report. Public holding more than 90% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment
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