Brokerage house Emkay Global Financial Services is bullish on KSK Energy Ventures and has recommended buy rating on the stock with a target price of Rs 107 in its research report dated June 4, 2015.
Emkay's research report on KSK Energy Ventures
Adjusted loss was lower than our expectation mainly because of higher realizations and lower fuel cost per unit
Most important trigger for KSK is conversion of tapering linkage into permanent linkage, the decision on which is likely in Jun15. We assume that KSK will receive domestic coal linkage supplies
In a scenario of cancellation of linkage, we believe that KSK is likely to still deliver value as 2 years down the line coal is likely to be sufficiently available. This is because of the good PPAs it has signed, when PPA tenders are not coming up
"At 0.6x book stock remains attractive. We maintain BUY with Revised target price of Rs 107/sh (reduced due to no captive mine)", says Emkay Global Financial Services research report.
Adjusted loss at Rs 1252mn was lower than our expectation of a loss of Rs2440mn mainly because of higher realizations and lower fuel cost per unit. The average relaxations during the quarter was Rs4.80/unit vs (+15% yoy) and the average fuel cost/unit during the quarter was Rs2.30/unit (-7% yoy). The reported loss during the quarter was Rs224mn, which was supported by creation of a DTA of Rs 3176mn. The PLF for the quarter was 48.7% vs 52.1% in 4QFY15, consequently the generation declined by 5% to 1588mn units.
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