Axis Direct recommended hold rating on Adani Power with a target price of Rs 27 in its research report dated June 06, 2017.
Axis Direct's research report on Adani Power
Q4 EBITDA at Rs 13.2 bn declined 50% YoY as (a) Adani Power (APL) did not recognize compensatory tariff (CT) at Mundra in Q4FY17 post recent Supreme court (SC) order (Total CT booked in Q4FY17 was Rs 2.5 bn vs. Rs 13.7 bn YoY) and (b) lower PLF at Mundra and Udupi due to tepid demand.
We roll forward our TP to FY19E. We consider compensatory tariff at Tiroda / kawai and for Gujarat and Haryana PPA at Mundra. We model turnaround in FY18E via higher PLF, tad lower imported coal cost and CT at Tiroda, Kawai and Mundra (Haryana/ Gujarat PPA). We have a HOLD rating with TP Rs 27.
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