MOSL: NHPC (Buy)-In-line-lower generation drives PAT decline; Cutting estimates by 5-7%
NHPC: In-line; lower generation drives PAT decline; Cutting estimates by 5-7%; maintain Buy
(NHPC IN, Mkt Cap USD3.6b, CMP INR25, TP INR34, 38% Upside, Buy)
- NHPC's standalone (S/A) 1QFY19 PAT declined ~14% YoY to INR7.4b (in-line) as generation declined 18% YoY to 7.03BU due to lower water in-flow which impacted energy charge recovery.
- Revenue declined 9% YoY to INR21.3b due to lower generation. Incentive income (PAF, UI and secondary charges) was unchanged YoY at INR2.2b.
- Employee cost declined ~13% YoY on retirements of 656 employees. Other expenses were also contained (unchanged YoY) on strict cost control.
- Depreciation increased 5% YoY to INR3.7b on capitalization of Kishanganga (for part of the quarter). Interest cost however declined 8% YoY to INR2.1b on repayment of loans and refinancing of debt.
NHPC Limited is engaged in electricity generation. The Company is engaged in electric power generation by hydroelectric power plants. The Company is also engaged in contracts, project management and consultancy works. Its power stations include Bairasiul, Salal, Chamera-I, Tanakpur, Dhauliganga, Rangit and Loktak. Its focuses on Teesta Low Dam-IV Hydroelectric Project (160 megawatt), West Bengal; Kishanganga Hydroelectric Project (330 megawatt), Jammu and Kashmir; Parbati- II Hydroelectric Project (800 megawatt), Himachal Pradesh, and Subansiri Lower Hydroelectric Project (2,000 megawatt), Assam/Arunachal Pradesh. It provides consultancy services in various fields of hydropower, including river basin studies, survey works, design and engineering, geological studies, geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing, commissioning, and operation and maintenance.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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