KSK Energy Ventures Ltd. share price target

Pangs to Persist in the Near-term; Stock Available at Significant Discount to Assets KSK Energy Ventures (KSK) incurred Rs2.91bn net loss in 2QFY17 owing to higher fuel cost, higher depreciation and interest cost on account of commissioning of Mahanadi Power Project. Though we expect the earning pain to persist in the near-term, we continue to remain positive on KSK as the stock is available at significant discount to its assets. Hence, we reiterate our BUY recommendation on the stock with a...

ff Trade Receivables: KSK's trade receivables include Rs8,423mn over multiple periods at KSK Mahanadi from various state DISCOMs both on account of: (1) various statutory duties, levies and cess levied by the Government, (2) presidential...

Earlier, KSK Energy stock value deteriorated ~60% on account of de-allocation of coal mines to its Mahanadi plant (80% of portfolio). However, at the CMP, stock is available at a significant discount to its asset. Thus, we recommend BUY on the stock with a revised Target Price of Rs60. At the same time, we believe near-term trigger could be long-term coal linkage for Mahanadi power plant, hence we shall...

Pain persists; Earnings to normalize from FY18E KSK Energy continued to report losses at Rs1,750mn in 2QFY16 (our expectation was net loss of Rs2,558mn) vs net loss of Rs828mn in 2QFY15 owing to 1) losses incurred by Mahanadi & Wardha Warora power plants, 2) higher interest charges (up 85% yoy) and, 3) high depreciation cost (up by 76%) due to commissioning of KSK Mahanadi power plant. KSK Energy's stock has lost 55% in last 12 months on account of de-allocation of coal mines to its Mahanadi plant (80% of portfolio). At CMP, stock is available at significant discount to its asset value. Thus,...

Losses persist; Earnings to normalize from FY17E KSK reported 58.6% yoy robust growth in its net sales in 1QFY16 on account of higher PLF from Wardha Warora plant. Though KSK displayed good show from sales front but it continued to report losses at Rs2,719mn in 1QFY16 (our expectation was net loss of Rs1,655 mn) vs net loss of Rs1,161mn in 1QFY15 owing to losses incurred by Mahanadi & Wardha Warora power plants, higher interest charges (up...