IDFC Securities - Power Grid Company of Bangladesh Ltd (POWERGRID) Power Grid Corporation of Indias Q4FY19 results (Outperformer) - FY20 guidance hostage to one large project

Report

IDFC Securities

Shirish Rane

Power Grid Corporation of India's Q4FY19 results (Outperformer) - FY20 guidance hostage to one large project

Q4FY19 result highlights

PGCIL’s projects capitalized in Q4FY19 were Rs92bn (+9% yoy) - standalone at Rs65bn (-16% yoy) and Rs26bn (vs Rs6bn) of TBCB projects. Total projects capitalised in FY19 was Rs258bn (-8% yoy_) – Rs193bn in Standalone and Rs65bn in tariff based competitive bid projects) in line with the expectation. We expect total capitalisation of Rs200bn in Standalone Company and nothing in tariff based competitive bid projects in FY20E (under subsidiaries).
PGCIL incurred capital expenditure of Rs76bn (-4% yoy) in Q4FY19. FY19 capital expenditure was Rs258bn, flat yoy - standalone basis at Rs218bn. a decline of 4% and TBCB projects of Rs40bn (+34% yoy)
Net sales increased by 18%/17% yoy to Rs95bn/351bn in Q4FY19/FY19. Transmission revenues increased by 20%/15% yoy to Rs90bn/Rs333bn aided by commissioning of projects worth Rs271bn in the past five quarters.
Adjusted PAT grew by 29%/14% yoy to Rs27bn (vs est of Rs23bn)/Rs96bn in Q4FY19/FY19. The profit has been adjusted for changes in accounting for deferred tax expense (details later).
PGCIL guided for commissioning of Rs210bn which is dependent on completion of Raichur Pugalur HVDC line (Rs147bn – scheme 1) . As per CEA, the project is facing severe RoW issues in Tamil Nadu

Key positives: FY19 commissioning of Rs258bn; Dividend of Rs8.3/share (vsRs5.3/share in FY18)

Key negatives: Dwindling cost plus projects; Very few bids concluded in FY19; Increase in receivables

Impact on financials: We maintain our earnings estimates in FY20E/FY21E

Valuations & view

We expect PGCIL’s earnings to register a 12% CAGR over FY19-21E, led by a 12% CAGR in regulated (invested) equity in the transmission business. We believe current valuations of 8.4x FY21E standalone earnings, 1.3x FY21E P/BV and 16%FY21E ROE are cheap considering the strong earnings growth profile over the next 2 years. We reiterate Outperformer rating with a based target price to Rs240 (12xFY20 earnings).

30/05/2019 1 EN

Underlying

Power Grid Company of Bangladesh Ltd

See profile

BD0308PGCB07 Dhaka Stock Exchange Bangladesh

Provider

IDFC Securities

IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.

See profile

Analysts

Shirish Rane

Other Reports on these Companies

EBL Securities Ltd.

Investment Opportunities in Bangladesh Power Sector 2021

The country’s power generation capacity has witnessed a boost in past decade riding on short-term costly projects, however, no significant progress yet observed in intermediate & long-term projects. The government provides attractive policy support for local and foreign investment in power sector including long term tax exemptions, easy capital gain and dividend repatriation, duty free machineries import etc. The government has been subsidizing power sector for years. The government provided over BDT500 billion as subsidy to power sector in last decade. The industry is highly regulated an...

EUR 228.35

December 5, 2021 December 5, 2021 35 EN

GMR Infrastructure's Q3FY20 results (Outperformer) - Air traffic growth improved at the airports; deleveraging process gains momentum

Q3FY20 result highlights Airport traffic recovered in Q3FY20 with Delhi Airport witnessing a 7% yoy growth in passenger (vs 5% decline in H1FY20) and Hyderabad Airport reporting a 9% growth in passenger traffic (vs 4.9% in H1FY20). Note that traffic was subdued in H1 because of Jet Airways shutdown of operations. GMR Infrastructure (GMR) revenues grew by 11% yoy to Rs16.7bn aided by strong non aero revenues growth of 12% and 138% yoy growth in rental revenues. EBITDA for airport business was Rs6.7bn, +28% yoy Energy Business - Warora and Kamalanga PLF for Q3FY20 was 81% (vs 75% in Q3FY1...

February 24, 2020 February 24, 2020 12 EN

Bhoomika Nair

Bhoomika Nair

Ambuja Cement's Q4CY19 results (Outperformer) - In line; cost efficiencies at play

Q4CY19 result highlights Adj PAT +54% yoy to Rs4.55bn: was above estimates on lower tax (shifted to new tax regime) while operational performance was in-line. Volume increased 6.7% yoy: to 6.54mn tons led by pickup in demand in North and East, growing ahead of industry (mkt share gains). Realisations +2.7% yoy: to Rs4795/t due to sharp price hikes across regions in 1HCY19. This was further augmented by 14% yoy growth in premium products. Hence, revenue was up 9.5% yoy to Rs31.4bn. However, on a qoq basis realisations fell by Rs198/t (-4% qoq) as prices have corrected across regions from p...

February 24, 2020 February 24, 2020 6 EN

Nitin Agarwal

Nitin Agarwal

Event update: Aurobindo Pharma (Outperformer) - Unit IV receives EIR; positive outcome

Event Unit IV has received an Establishment Inspection Report (EIR) with Voluntary Action Initiated (VAI) status by USFDA Key highlights With the receipt of this status, FDA will now start granting new ANDA approvals from this facility. Notably, in mid-November, the USFDA had conducted a surprise inspection for nearly 10 days in Unit 4, post which it had issued 14 observations. While our read of the observations suggested that most of these were primarily procedural, market has been concerned around potential escalation of the issues into an OAI which, in turn, would have impacted revenu...

February 24, 2020 February 24, 2020 4 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

Power Grid Corporation of India's Q4FY19 results (Outperformer) - FY20 guidance hostage to one large project

Investment Opportunities in Bangladesh Power Sector 2021

GMR Infrastructure's Q3FY20 results (Outperformer) - Air traffic growth improved at the airports; deleveraging process gains momentum

Ambuja Cement's Q4CY19 results (Outperformer) - In line; cost efficiencies at play

Event update: Aurobindo Pharma (Outperformer) - Unit IV receives EIR; positive outcome

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe