Scripscan:Adani Power Ltd
cmp:60
Code:533096
Story:Adani Power Limited engages in the generation of power and setting up of power projects in India. The company owns 8 thermal power projects under various stages of development, with a combined installed capacity of 13,200 MW. It also operates a 400 KV D/C Mundra – Dehgam power transmission line of 430 Kms. The company was incorporated in 1996 and is based in Ahmedabad, India.Adani Enterprises presentation indicates 6.4mn tons of linkage coal from MCL against 10mn tons envisaged earlier. Hence I make the requisite change in my model and assume the gap of ~2.5mn tons (70% of 3.6mn tons) to be bridged by e-auction or spot coal.As a result, I estimate an increase in cost of generation.I reduce my target price to Rs101/share from Rs115 earlier primarily on account of changes in fuel source mix (as mentioned above). I also lower our generation estimate to account for shutdowns taken in Q2, but maintain my FY12 capacity of 5.9GW, merchant tariff at Rs4.25/unit for FY12 and FY13 and landed cost of Indonesian coal (do not build in an increase due to the change in Indonesian regulation). Maintain HOLD, but with a reduced target of Rs 101 per share to be achieved in the next 2 years.
