NHPC Ltd. share price target

NHPC's results highlight the benefit of cost approval for its TLDP-IV project, resulting in the doubling of profits on a YoY basis. Adjusted for one-offs, S/A PAT declined 9% YoY to INR3.7b on lower generation. The capex run-rate is expected to increase on account of investments in new projects. However, their commissioning remains 45 years away ...

Capex run-rate is expected to increase on account of investment in new projects. However, their commissioning remains 4-5 years away, implying FCF/RoEs dragging in the near term. Maintain Neutral with TP of INR23. Profits in line as lower other income offsets modest generation growth NHPC's S/A PAT declined 3% YoY to INR13.0b (v/s est. INR13.3b) on account of lower other income. Other income was down 15% YoY to INR4.3b. Generation was up 4% YoY to 9.4BU in 2QFY21 based on data available at...

INR6.8b) due to Generation declined 5% YoY to 8.1BU in 1QFY21 due to the shutdown of 2 Chamera units and lower water availability. NHPC is also planning to complete the linkage of work by Oct20, thereby increasing discharge of water for Parbati-II. NHPC expects to receive INR18b from the PFC-REC scheme on completion of certain formalities for J&K.; Capex run-rate, on the other hand, is expected to increase as the company is investing/exploring new projects, which is expected to reduce FCF and drag RoEs in the near term. Generation declined 5% YoY to 8.1BU in 1QFY21 due to shutdown of two Chamera units and lower water availability. Moreover, commissioning for the project is still some time away (FY24 Capex run-rate, on the other hand, is expected to increase as the company is investing/exploring new projects, which is expected to reduce FCF and drag RoEs in the near term.

NHPCs results highlight the benefit of higher generation and the low base of the previous year. Capex run-rate is expected to increase on account of investment in new projects. However, their commissioning remains 4-5 years away, implying NHPCs standalone PAT more than doubled YoY to INR4.0b (from INR1.8b in 3QFY19; in line with our estimate of INR4.0b) off a low base. The previous year included the impact of regularization of pay scales (INR1.9b). noted while Dibang is still in the initial stages, capex would be required for providing access to the site such NHPC highlighted the current quarter also included provisioning of INR0.6b for PRP given incremental profits. Capex run-rate, on the other hand, is expected to increase as the company is investing /exploring new projects which will reduce FCF and drag RoE over the near term. Capex guidance for NHPC noted the current quarter was impacted by INR0.6b on account of.

INR12.4b) on the back of resumed income recognition for its Subansiri project (since 1QFY20). Construction on NHPCs Lower Subansiri (2,000MW) project has restarted from Oct19. NHPC expects the project to be completed by 2QFY24. Company expects the project to be commissioned in FY22 (unchanged). Capex run- rate, on the other hand, is expected to increase as the company is investing/ exploring new projects. in prior quarter numbers Management has noted that work on Subansiri project has resumed and the project is expected to be completed by 2QFY24. The tender for Power house is yet to be awarded and company is in the process The project requires a tunnel of 31km, of this, 2.5km is yet to be completed and NHPC expects the project to be commissioned in FY22. Company expects the project to be completed in 5 years time.

The NGT has given a favorable order for the Lower Subansiri (2,000MW) project clearing the last legal hurdle for re-starting the project. According to the management, local people have been supportive of the various CSR initiatives undertaken by the company over the years. It expects to restart fullscale construction after the monsoon season. With clarity on the project, it has resumed capitalizing expenses (stopped w.e.f. 2QFY19) on the project....

Earnings growth muted, capex run-rate increasing; Maintain Neutral Standalone (S/A) adj. PAT of INR36m in 4QFY19 was below our estimate of INR1.6b due to higher-than-expected operating cost. This also implies a sharp fall from INR1.9b in 4QFY18, particularly because the company no longer capitalizes expenses (as part of regulatory deferral account) for the Lower Subhansiri power...

21 November 2018 NHPCs many recently commissioned projects are still not contributing to PAT. Kishanganga 330MW is breaking even at PAT, pending final approval of tariff order. Parbati-3 has been commercialized, and 2 units of 200MW of Prabati-2 have been commissioned but full revenue recognition will be post completion NHPCs standalone (S/A) PAT increased 20% YoY to INR12.2b in 2QFY19, led by generation growth of 11% (aided by commercialization of the 50MW solar unit in Mar18), the resumption of TLDP-3&4 and the absence of revenue reversal for Parbati-3, partly offset by lower other income and regulatory revenue. NHPC has stopped recognizing regulatory revenue against the Lower Subhanshari project, which has been stalled since Dec11. This will drag PBT by INR1.1b every quarter until the project is restarted. Renewable energy projects have contributed PBT of INR217m in 1HFY19. We lower FY19/20E PAT by 7/12% to ~INR23.4b/27.4b, primary due to the loss of regulatory revenue from the Lower Subhanshari project. We expect under-recoveries to reduce in FY20 on approval of pending final tariff for five projects and pass-through of wage hike in new regulation 2019-24.

6 September 2018 NHPCs consolidated PAT declined ~17% YoY to INR25b in FY18. It was impacted periods revenue reversal at Parbati-III U-IV plant; (b) lower other income due to lower treasury and lower late-payment surcharge income; and (c) lower Stripping out the other income, prior-period items, one-offs and shutdown impact, the standalone (S/A) generation PAT grew by a healthy 19% YoY (Exhibit 1) even as regulated equity remained unchanged. Core (i.e. generation business) RoE on regulated equity increased ~200bp YoY to ~15%. We calculate O&M; under-recovery reduced on lower cost (Exhibit 2) and with a normative annual increase in O&M; allowance. Standalone (S/A) debtor days continue to improve, down to 67 days in FY18 from 75 days in FY17, and with a peak of 141 days in FY13, releasing INR5.8b. But INR5.4b payment to a contractor under arbitration offset this benefit. Cash capex was INR15.3b while the rest was allocation of cost through P&L;.

NHPC achieved CoD of 330MW Kishanganga project in April'18, but Parbati II (4x200MW) capacity is now expected to be commercialized only by FY21E-22E. Final report on Subansiri by MoEF has been kept reserved as the NGT is yet to decide whether the project is to be appraised through the current committee or form a new committee. We have cut our earnings estimates by 8.6%/14.9% for FY19E/20E to factor in delay in the commercialization of Parbati II project. Accordingly, we cut our SOTP-based Target Price (TP) to Rs31 v/s Rs34.6 earlier. We...

4 June 2018 INR1.7b), boosted by late payment surcharge income of INR1.5b, but partly offset by 32% YoY decline in incentive income to INR1b. Generation declined 35% YoY to 2.16BU due to hydrology. For FY18, S/A PAT was down ~1% YoY to INR27.5b. Higher dividend income from subsidiaries was offset by revenue reversal at Parbati-III Unit-IV and shutdown at TLDP. O&M; under-recovery reduced by ~INR1b on lower employee and other expenses. S/A regulated equity increased 0.6% YoY to INR109b. Generation declined 1% YoY to 22.9BU in FY18. Consolidated PAT declined 17% to INR25b due to lower other income (less liquid surplus and lower later payment surcharge) and ~40% decline in PAT at NHDC subsidiary (~51% stake) due to lower generation. Kishanganga 330MW was commissioned in May 2018.

The under-recovery in O&M cost is more than INR5.5b. It would decline to less than INR2b when the O&M norms are reset in the next tariff regulations in FY20. The decline in under-recoveries will also be aided by reduction in number of employees (count has reduced from ~8,000 in FY17 to ~7,500 in FY18 and will decline to ~6,500). The revenue under-recovery of INR1.5b- 2b per year on four projects due to over-run in capital cost, which is pending approval, is also likely to be recovered by FY20. Of the four projects, three are in the first review stage of CEA, while one is in the second review stage of PIB. The final stage is approval by CCEA

NHPC Ltd Q3FY18 results comment Revenue fell by 24.02% to Rs. 1497.93 Cr in Q3FY18 when compared to the previous quarter. On the other hand, it increased by 14.47% when compared with Q3FY17.

We have revised our estimate upward to factor in higher dividend income in 9MFY18 and accordingly upgrade our SOTP target price to Rs34.6 as we continue to expect a better project execution visibility for FY19E/20E. Maintain our BUY rating on attractive valuation....

NHPC's 3QFY18 underlying PAT grew 40% YoY to INR2.7b (ahead of our estimate of INR2b), led by higher incentive income, lower other expenses, and saving in interest cost. Underlying PAT is adjusted for (a) dividend income of INR2.4b from NHDC and (b) late payment surcharge of INR2.3b (gross tax). Generation was up 1% YoY to 3.4BU. PAF increased ~270bp YoY to 76.8%. Incentive income increased 59% YoY to INR1.1b. Interest cost saving of INR1.1b was achieved on repayment and refinancing of debt. Refinancing will generate annualized saving of INR340m, of which INR170m will be retained by NHPC

Regulated equity to increase 35 %, despite Subhanshiri project being on hold NHPC is targeting commercialization of the 330MW Kishanganga project from January 2018 and the 800MW Parbati-II project from December 2018. These two projects will increase AES in capacity by 19 % and attributing regulated equity (ARE) by 35 %. The 2,000MW Subhanshiri project remains on hold for now. Under-recoveries to decline on natural attrition and approval of five tariff orders O&M under recoveries have peaked, in our view. Wage bill growth will be muted due to high natural attrition, while existing manpower can manage new projects. We expect approval of capex for the five projects over the next few years, which can boost recurring PAT by INR1.5b. Higher dividend payout is boosting RoE; room for even higher payout/buyback Capital allocation has improved with a payout of INR113b in four years. Debtor days have come down after the implementation of the UDAY scheme for DISCOMs. Net worth (NW) in non-core business has dropped from 51 % to 36 %, and RoE has improved from 8.7 % to 9.9 % over FY13-17. Another 32 % of NW can be paid out, which is not deployed in core business

NHPC Ltd Q2FY18 results comment Revenue decreased by 15.24% to Rs. 1971.42 Cr in Q2FY18 when compared to the previous quarter. Also, it fell by 16.51% when compared with Q2FY17.

For Q4FY17, PAT came in at Rs1.7bn which was significantly below our and consensus expectation of Rs3.9bn. This was primarily due to poor hydrology, leading to low rainfall and higher share of Secondary energy sale on YoY basis, resulting in low realisation....

ICICI Securities Ltd | Retail Equity Research NHPC reported Q4FY17 results, which were below our estimates on all counts. Lower revenues and higher employee expenses (gratuity provisions) marred profitability Revenues came in at | 1362.4 crore, down 16.7% YoY, below our estimate of | 1786.7 crore. During FY17, NHPC commissioned two units of TLDP-IV project worth 80 MW, 50 MW wind power project Absolute EBITDA was at | 223 crore vs. estimate of | 907 crore. This...

Revenue grew by 2.18% to Rs. 1337.59 Cr in Q4FY17 when compared to the previous quarter. Revenue grew by 2.18% to Rs. 1337.59 Cr in Q4FY17 when compared to the previous quarter.