MOSL: NHPC (Neutral)-In-line-Work on Subansiri restarts; Capex run-rate increasing
NHPC: In-line; Work on Subansiri restarts; Capex run-rate increasing; Maintain Neutral
(NHPC IN, Mkt Cap USD3.3b, CMP INR23, TP INR25, 7% Upside, Neutral)
2QFY20 standalone PAT increased ~10% YoY to INR13.4b (v/s est. INR12.4b) on the back of resumed income recognition for its Subansiri project (since 1QFY20). Generation declined 5% YoY on lower water availability, shutdown at Chamera and R&M activities at Baira Siul. Revenue rose 4% YoY to INR26.1b on recognition of pay revision. Other income was up 6% YoY to INR5b (v/s est. INR4.2b). For 1HFY20, PAT was up 14% YoY to INR22.2b.
- Construction on NHPC's Lower Subansiri (2,000MW) project has restarted from Oct'19. Contracts for construction of the power house though are yet to be awarded. NHPC expects the project to be completed by 2QFY24.
- Parbati-II (800MW) continues to face geological challenges. Company expects the project to be commissioned in FY22 (unchanged).
- The final capital cost approval for the five projects is expected over the next few months. This, we estimate would boost revenues by ~INR2-3b per annum.
- Capex stood at INR16b for the quarter. Full-year guidance is at INR38b (unchanged).
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.
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