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BPCL's Q2FY21 result was a beat to our forecast led by better than expected refinery margins owing to higher inventory gains and significant dip in finance cost. Reported GRM came at US$5.8/bbl owing to inventory gain of Rs13bn (US$4.3/bbl) while core GRM stood at US$1.5/bbl, beat to our estimate. Petroleum product sales volume declined 15% YoY to 9.2mmt while crude throughput declined 27% to 5.6mmt, below our estimates. Management highlighted that except ATF, growth for most of the product has crossed pre-Covid levels. We are revising our crude oil price assumption slightly downwards to US$45/bbl for FY22 from earlier US$50/bbl and expect higher supply and demand concern...
Company debt further decreased on a QoQ basis to INR915b in 2QFY21 (from INR986b in 1QFY21 and INR1,165b in 4QFY20). India is seeing a significant increase in vehicular traffic movement, with gradual revival in domestic air travel as well. In Sep'20, petrol witnessed consumption growth of +3.3% (v/s -7.5% in Aug'20). Diesel still recorded decline of 6.0% YoY, although much lower than 20.7% in Aug'20. We continue to prefer IOCL, which, despite having annual capex of ~INR260b (the highest among the OMCs), is expected to report ~30% cumulative FCF yield over...
Q2FY2021 adjusted operating profit at Rs. 4,485 crore/ Rs. 2,581 crore, up 101%/46% y-o-y) was above ours and the street's estimates due to higher-than-expected inventory gains at Rs. 2,453 crore, better volumes and lower interest costs. A sharp beat in reported GRM at $5.8/bbl (up 71.6% y-o-y) led by refinery inventory gains of $4.3/...
We increase our FY21E earnings estimates by 45% to incorporate inventory gains of Rs30bn in H1FY21 and make minor changes and increase FY22-23E by 5%. During Q2FY21, core standalone EBIDTA adjusted for inventory gains and forex gains was low at Rs12.5bn (-63%QoQ) due to lower core refinery...
We initiate coverage on Indian Railway Catering and Tourism Corporation (IRCTC) with TP of Rs1,800 based on PER of 35x FY23E. We believe that IRCTC is a one-of-its-kind company. In its top-2 segments internet ticketing and catering services (combined ~89% of FY20 EBIT) it is the sole service provider. Internet ticketing as digital platform business has seen 302 mn bookings in FY20 with ~73% share in total railway ticket booked in India. In its packaged drinking water business it's pricing provides a competitive edge. While Covid-19 pandemic will impact FY21 performance, we expect strong pick-up in FY22/23E. We forecast revenue/EBIT/EPS CAGR of 9.2%/14.4%/15.9%...
NTPC's Q2FY2021 PAT at Rs. 3,505 crore (up 7.4% y-o-y) was in-line with our estimate of Rs. 3,502 crore as higher-than-expected higher surcharge income at Rs. 657 (up 20% q-o-q) and increased regulated equity (up 19.3% y-o-y) was offset by FC underrecoveries of Rs. 271 crore. Management has guided for strong commercialisation of 5,566MW for FY2021, 7,336MW for FY2022, and 5,016 for FY2023 and expects fixed cost under-recoveries to reduce to Rs. 200 crore-220 crore by March 2021. NTPC board has approved buyback of equity shares not exceeding 19.8 crore shares (2% of the total paid up equity share capital) at a price of Rs. 115/share (29% premium...
17 September 2020 We analyzed details of Power Grid (PWGR)s tariff-based competitive bidding (TBCB) projects from their annual reports. At an aggregate level, in our view, PWGR should be able to generate ~14% equity IRR (assuming a debt-to-equity commissioned TBCB projects varies in the range of 227%. TBCB currently remains small in the overall context (3% FY20 PAT; 5% gross block). However, with increased awarding at the interstate/intrastate level on a TBCB basis, its pie would eventually grow. Over the past one year, PWGR has won ~7 projects on a TBCB basis. We expect profits from TBCB projects to rise to INR7.8b in FY23 from INR3.7b as new projects get commissioned. PWGR also seeks to monetize its TBCB assets through the InvIT mode and has acquired an in-principle approval from the board and the cabinet. PWGRs eight commissioned projects account for a gross block of ~INR125b.
Deferral of key projects impacts order inflows During Q1FY21, order inflow was at | 1485 crore, down 62% YoY, (| 982 crore from power segment, | 442 crore from industrial segment, | 61 crore from exports segment). Bhel's order backlog as on Q1FY21 was at | 108126 crore (| 86603 crore in power, | 13447 crore in industrial, | 8073 crore in exports). Of total order backlog, executable orders were at 87967 crore. It is favourably placed in orders like Talcher power plant. However, few power projects including Lara, Singrauli and Pench power plants are getting...
BHEL secured orders worth Rs14.9bn in 1QFY21 translating into an order backlog of Rs1.1trn (5.7x trailing revenues). BHEL reported weak performance for the quarter wherein both segments Power/Industry revenue de-grew by 68%15% YoY. During the quarter order inflows de-grew by 62% YoY led by delay in ordering activity, deferment due to Covid-19 pandemic and overall stress in power sector. Order backlog stands at Rs1.08trn, flat YoY (executable OB ~Rs880bn) providing revenue...
We now expect BHEL to report loss in FY21E and have also reduced our FY22E earnings estimate by 21% to factor poor execution and a weak ordering environment. EBIT loss stood at INR2.5b (v/s profit of INR349m Order book (OB) was flat YoY at INR1081b, with OB/rev at 5.7x. Total receivables remain elevated at ~INR360b, of which 12% are from the private sector, 48% from state entities, 33% from the center, and 7% pertain cost at ~25% of sales. In FY20, working capital deteriorated to 99% of sales from 65% in FY19 due to higher inventory, slow movement in receivables, and poor We now expect BHEL to report loss in FY21E and have also reduced our FY22E earnings estimate by 21% to factor poor execution and a weak ordering environment. While the company has received EoIs from three major OEMs regarding its ongoing diversification drive, we believe any material financial impact is still some time away.
The ARA talks about the strategies and opportunities foreseen in medium to long term, future capex and expansion of geographical reach to neighboring countries. It is also eyeing new segments like warehousing, ecommerce, 3PL/ 4PL, distribution logistics, coastal shipping. Commencement of DFC will bring cost advantage, improved turnaround time along with rise in volumes and utilization through more double stack trains. However, the last one year has been tough with SEIS income provisioning, shocker on land license fees, and a 20% volume de-growth...
Q1FY21 revenue from operations drop 31.8% YoY to Rs. 17,007cr, owing to lower demand from power sector, as commercial establishments such as offices and factories largely remained shut during the quarter owing to lockdown. FSA revenues of raw coal went down 22.2% YoY at Rs. 13,896cr as sales volume registered a 21.6% YoY decline to 102.2mt. However, average FSA realizations decreased marginally to Rs. 1,360/ton (-0.8% YoY). Similarly, E-Auction revenue of raw coal took a hit reaching Rs. 2,535cr (38.2% YoY) due to lower sales volume of 15.87mt (-16.7% YoY) and lower average realization of 1,598/ton. The washed coking coal revenue fell 47% YoY to Rs. 177cr during the quarter, due to lower sale volume of 0.3mt (-35.4% YoY) and decrease in...
operating profit to Rs 8839.29 crore. Other income of the company fell 30% to Rs 1079.41 crore. Interest cost fell 1% to Rs 1497.66 crore. Depreciation (includes Depletion, Amortization and impairment losses) cost increased 2% to Rs 5847.94 crore. PBT was down 77% Rs 2573.1 crore. Tax expenses were down 79% to Rs 922.19 crore. Net...
YTD, both production, offtake remain lower YoY In the current fiscal (YTD), the company witnessed a muted trend in both production and offtake volumes. During April-August 2020 (YTD), CIL reported production of 195.5 MT (down 7.0% YoY) while offtake during the period was at 208.4 MT (down 13.4% YoY). During the current fiscal, August 2020 is the only month where the company was able to report growth in production and offtake on a YoY basis. For August 2020, CIL's coal production increased 7.1% YoY to 37.2 MT (34.7 MT in August 2019) while...
Receivables fell 10% in August'20 v/s June'20 to Rs210bn Coal India (COAL) reported Q1FY21 EBITDA in line with our expectation. In spite of attractive valuations (EV/EBITDA at 2.5x FY22e), stock would continue to remain under pressure due to frequent stake sale by Govt and pressure on profitability in E-auction (contributes>50% of EBITDA) in light of weak global prices and sluggish demand. Release of additional supplies due...
