Scripscan:NHPC Ltd
cmp:21
Code:533098
Story:NHPC reported 3QFY12 PAT of INR2.2b. Adjusted for several extraordinary/ exceptional items, PAT stood at INR2.7b (up 51% YoY), in-line with estimates.During 3QFY12, NHPC's (standalone) generation stood at 3.1BUs, up 2% YoY. Barring Loktak, all other NHPC projects reported degrowth in generation and average PLF stood at 38% v/s 37% YoY. Incentives income comprising of UI, Secondary Energy and PAF stood at INR770m v/s INR1.57b in 2QFY12 and INR1.8b in 1QFY12.NHPC has lowered its capacity addition targets for FY12 and FY13 to 313MW (v/s earlier guidance of 515MW) and 673MW (v/s 1.1GW earlier), respectively. It is facing (1) regulatory and administrative bottlenecks for some of its projects in J&K (Uri, Chutak , Nimoo Bazgoo) and Arunachal Pradesh (Subhansri Lower), and (2) environment issues at Kotle Bel. This, in our view, has further diminished visibility on capacity addition ramp-up, which is already delayed significantly. NHPC is also facing delays in receivables, and 33% of its debtors (i.e. INR9b) are 60 days old. The SEBs/discoms not paying NHPC on time include Punjab, Jaipur and Reliance Infrastructure, and account for 95% of the receivables over 60 days.I cut my FY12/FY13 estimates to factor in capacity delays, and expect NHPC to report PAT of INR17.2b in FY12 (down 1% YoY) and INR23b in FY13 (up 31% YoY). Stock trades at P/E of 13x FY12E and 10x FY13E, and P/BV of 0.9x (both years). Re-iterate Neutral.
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