Energy and Power share price target

The Central Electricity Regulatory Commission (CERC) floated draft regulations on tariffs for central power companies for the period FY20-FY24. The regulator has maintained the regulated RoE, along with a cushion for coal GCV deterioration, auguring well for regulated entities such as NTPC. The regulations are expected to be finalized by February 2019. The key...

Brent Crude oil price weakened by 18.6% MoM to average US$65.5/bbl in Nov'18 on the back of concern on demand growth and higher non-OPEC supply expectation for 2018 and 2019. OPEC expects global demand growth to be ~1.3mbpd while Non-OPEC supply is expected to increase by ~2.2mbpd. OPEC production declined marginally by 0.6% MoM to 33.1mbpd on the back of higher production from Saudi Arabia partially offset by Iran, Iraq and Libya. Non-OPEC production increased marginally by 0.6% MoM to 60.2mbpd owing to higher production from North Sea and Russia. US Crude oil inventory stood at 443mn bbls up 5.8% for the month of Nov'18. US Refinery utilization have improved by 4.2% MoM to average at 92.8% for the month of Nov'18. Also, Singapore Gross refining margin (GRM) declined by 4% MoM to US$4.8/bbl in Nov'18 mainly led by lower crack spreads from Fuel Oil, Gasoline and Gasoil. Gross Marketing margins remain at elevated levels for the month of Nov'18. Arab Light-Heavy differential declined by 4% MoM to US$2.3/bbl whereas Rupee appreciated by 2.5% MoM to Rs71.8/US$ in the month of Nov'18. On Natural Gas space, LNG prices remained higher at US$9.7/mmbtu owing to strong demand across countries like China, Japan, US and India. We expect Spot LNG prices to...

After several months of softening, Brent Crude oil price surged 7.8% MoM to US$78.9/bbl on the back of tight supply scenario. OPEC production remained flattish in Sept'18 at 32.8mbpd owing to higher production from Libya and Saudi Arabia which was offset by lower volume from Venezuela and Iran. Production loss from Iran post economic sanctions from US would be a key thing to watch which may have a significant impact on crude oil price. Further, Non-OPEC production also remained flattish for the second consecutive month at 59.2mbpd in Aug'18. US Crude oil inventory declined 2.8% MoM in 398mn bbls Sept'18 reflecting strong demand scenario. US refinery utilization declined 3.9% MoM in Sept'18 to 93.5%. Also, Singapore Gross refining margin (GRM) declined by 12% MoM to US$6.0/bbl in Sep'18 on the back of lower crack spreads of Gasoline and Jet Kero, partially offset by higher crack spread of Naphtha, Gasoil and FO. We expect crude oil price and GRM to remain robust in near term as winter season is around the corner when we see spurt in demand. On Natural Gas space, LNG prices have moved higher 8% MoM to US$11.2/mmbtu led by incremental growth from China and Japan. We expect Spot LNG prices to remain tight...

Brent crude oil price remained in a very narrow range and slipped marginally for the third straight month by 1.8% MoM to average at 73.1/bbl in Aug'18 as higher OPEC and US supply was offset by strong demand growth. OPEC production was up marginally by 1.3% MoM in Aug'18 to 32.7mbpd on the back of higher production from Iraq and Libya partially offset by Iran. Non-OPEC production remained flattish for the month of July'18 owing to higher production from US and Gabon offset by Mexico. US crude oil inventory also remained flattish in Aug'18 at 409mn bbls which is maintaining the pressure on crude oil prices. US refinery utilization inched upwards by 2.2% MoM in Aug'18 to an all-time high of 97.3%. Despite higher utilisation, Singapore gross refining margin increased 20% MoM to US$6.8/bbl owing to higher crack spreads from Gasoil, Gasoline and FO, partially offset by lower Jet Kero cracks. Product spreads for Gasoil, Gasoline and FO increased in the range of 10%-15% MoM in Aug'18. We expect incremental crude oil demand of ~1.3-1.5mbpd vs. incremental supply of ~0.8mbpd in 2019, which would keep GRMs stronger in near to medium term....

Refer to important disclosures at the end of this report Coal inventory position shows positive trend after two years of decline Power generation grew by 4.8% yoy in July'18, driven by moderate growth across all segments (barring Gas-based plants). Power generation increased by 5.1%, 2.1%, 14.1% and 8.4% yoy across Coal, Hydro, Nuclear and Renewable sector, respectively, while it declined by 5% in Gas-based plants. The overall industry PLF remained flat during the month. PLF improved in Coal to 54.4%...

12 August 2018 MRPL's reported EBITDA of INR8.1b (+40% YoY, -22% QoQ) for 1QFY19. The company booked a forex loss of INR3.9b v/s a forex gain of INR315m in 1QFY18 and a forex loss of INR1.5b in 4QFY18. Excluding the forex loss, EBITDA stood at INR11.9b (+117% YoY, +1% QoQ), 14% higher than our estimate of INR10.6b due to higher inventory gain of USD3.49/bbl. The company booked an exceptional item of INR262m on account of estimated cost for purchase of Renewable Energy Certificate (REC) from the Indian Energy Exchange (IEX). Adj. PAT stood at INR3.8b (v/s est. of INR5.4b; +62% YoY, -30% QoQ), increased difference at the PAT level being mainly due to a higher tax rate of 36% (v/s est.

Refer to important disclosures at the end of this report Inventory situation deteriorates; International coal prices surge Power Generation increased by 5.8% yoy in Jan'18 (excluding Renewables), driven by growth across all segments. Generation increased across Coal (+5.1% yoy), Gas (+8.9%...

Refer to important disclosures at the end of this report Inventory situation improves across plants; capacity addition on hold Power Generation increased by 1.4% yoy in Dec'17 (excluding Renewables), as growth in Gas (+3.2% yoy), Hydro (+10.2% yoy) and Nuclear (+36.1% yoy) segments was offset by...

Reiterate BUY with a TP of Rs 25/share (11x Jun-19E EV/EBITDA). After a lacklustre performance by Inox Wind and Sanghvi Movers, Suzlons (SUEL) 1QFY18 results surprised positively, with volume doubling to 412MW (vs. 204 MW in 1QFY17). Revenues / EBITDA grew 62 / 177% YoY. EBITDA margins stood at 17.8% (+740bps YoY). APAT came in at Rs 915mn (vs. loss of Rs 2.1bn YoY). The order blacklog stands at 1,169 MW, half of which is PPA-backed or for captive consumption. Despite the shift from a FIT-based regime to a bid-based one, mgt expects the industry size in FY19 to be ~6 GW, and grow further.