12 February 2016
3QFY16 Results Update | Sector:
Utilities
BSE SENSEX
22,986
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val (INR M)
Free float (%)
S&P CNX
6,981
RTPOW IN
2,952.9
26.6/0.4
13 / 6
-22/35/5
19
42.5
RattanIndia Power
CMP: INR9
TP: INR 11 (+22%)
Buy
Backdown by DISCOMs impact PLF, PAT below estimate
Consolidated EBITDA below estimate:
RattanIndia Power reported
consolidated revenue of INR8.7b (up 476% YoY), lower than our estimate of
INR9.6b. Net generation at ~2.1BUs (v/s 1.54BUs in 2QFY16) lower than
estimate of 2.4BUs. This is due to higher backdown by DISCOMs due to poor
demand. Consolidated EBITDA was INR3.5b below our estimate of INR4.5b led
by the same. Higher fuel cost (INR2.27/unit v/s estimate of INR2/unit) led to
lower contribution. Reported net loss stood at INR295m, vs our estimate of
PAT of INR486m.
Amravati PLF at 69%+ in 3Q, Operational performance to look up from 4Q
onwards:
In 3QFY16, Amravati project PLF (plant load factor) improved to
69%, vs 56% in 2QFY16 and merely 20% in 1QFY16. It is important to note that
PAF (plant availability factor) however stood at 81%, vs 66% in 2QFY16 and
23% in 1QFY16. This indicates increased materialization of domestic coal and
higher receipt of imported coal. Given higher PAF for 3QFY16 and
improvement in seasonal demand in 4Q, operational performance would look
up from 4QFY16 onwards.
Cut FY16E earnings to factor lower PLF:
We have cut our FY16E earnings as
backdown has led to lower PLFs. We now expect net loss in FY16E of INR1.8b,
vs break-even earlier. We retain our FY17E/18E estimate as operations would
normalize from 4QFY16 onwards. Commissioning of Nashik project by CY16
and signing of PPA are key triggers. Stock trades at 3x FY17E EPS and 0.5x
FY17E BV.
Financials & Valuation (INR Billion)
Y/E MAR
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
2016E
30.9
13.7
-1.8
-0.6
-73.3
16.7
-3.5
5.9
-14.4
0.5
2017E
53.6
27.7
8.9
3.0
-603.5
19.2
16.9
12.5
2.8
0.5
2018E
80.1
33.6
11.6
3.9
29.9
22.4
18.9
14.8
2.2
0.4
Estimate change
TP change
Rating change
Nalin Bhatt
(NalinBhatt@MotilalOswal.com); +91 22 3982 5429
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.