Adani Power Ltd. share price target

Adani Power (APL) has reported consolidated profit of Rs1.0bn, after 11 quarters of consecutive losses, in 3QFY16 due to one-time recovery of compensatory tariff of Rs1.28bn & Interest cost saving of Rs3bn on account of 5/25 scheme. More than past 11 quarters, Adani power has been reporting dismal numbers due to lack of adequate coal supply from Bunyu mines thus forcing it to blend expensive spot coal inventory and higher import of coal due to limited availability of domestic coal. However, in the last 15-18 months as the stock price has been corrected to more than 60%, we believe negatives are factored in the current...

Adani Power (APL) reported a consolidated total income of Rs57.5bn in 2QFY16 up 38.6% yoy compared to Rs41.1bn in 2QFY15. Revenue during the quarter increased due to improved PLF along with additional revenue of Rs5.7bn contributed by UPCL. The company reported a net loss of Rs3.6 bn in 2QFY16 (in line with our expectation of a net loss of Rs4.3bn) as compared to a loss of Rs7.9bn in the same quarter a year ago. Adani power has been reporting dismal numbers since more than 11 quarters due to lack of adequate coal supply from Bunyu mines, forcing it to blend expensive spot coal along with higher imported coal. In our view, the long-term fuel security still remains a concern...

We maintain our earnings estimates for FY16E / FY17E, however, we have reduced our base merchant realization from Rs4.25/Unit to Rs4.0/unit and increased our annual coal price hike assumption from 2% to 5% from FY17E onwards, thereby lowering our DCF-based Target Price to Rs31. At the CMP, the stock is trading at P/BV of 1.5x and 1.7x its FY16E and FY17E and EV/EBITDA of 8.0x FY17E with (5.8)% RoE. We maintain SELL recommendation with a revised Target price of Rs31, as we believe that the stock is expensive given high risks on...

total capacity to about 5,940 MW and 6,600 MW in FY12 and FY13 respectively. This includes Mundra Project (four units, aggregating to 2,640MW) and Tiroda Project (Phase I & II aggregating to 1,980MW). Background: Adani Power (APL) is promoted by Adani Enterprises, which is the flagship company of Adani Group. APL has a capacity of 1,980 MW as on FY11 and is currently in the process of commissioning 6,600MW of power, which is in various stages of development. All of the...

Adani Power (APL) is likely to benefit from rapid capacity expansion of about 3,960 MW capacities in FY12 and 660 MW in FY13 taking its total capacity to about 5,940 MW and 6,600 MW in FY12 and FY13 respectively. This includes (Phase I & II aggregating to 1,980MW). By the end of FY15, the company expects to operate a power generation portfolio of 10,560MW....