Dear All,
Forwarding you the Result Update on GIPCL for 4QFY2011 with an Accumulate recommendation and a Target Price of `94 (12 months).
For 4QFY2011, GIPCL posted 124.9% yoy growth in net profit to `81.2cr due to a substantial reduction in fuel costs and write-back of taxes relating to previous years. During the quarter, the company’s 165MW Vadodara Station II was shut down for maintenance, which led to low PLF of 30.8% (as against 80.8% in 4QFY2010), resulting in low fuel costs. However, Vadodara Station II achieved the requisite PAF for FY2011 as a whole and, hence, the company’s top line was not impacted majorly in 4QFY2011. Consequently, OPM surged to 39%. The company indicated that operations of the newly commissioned SLPP Units 3 and 4 (250MW) have stabilised and are currently operating at healthy PAFs of ~80%. We recommend Accumulate on the stock.
Top line up by 24.1% yoy: GIPCL’s 4QFY2011 top line rose by 24.1% yoy to `315cr, aided by the commissioning of SLPP units 3 and 4. However, power generated during the quarter was lower by 29.8% due to lower PLFs reported by all of the company’s plants on a yoy basis. OPM for the quarter rose by 1,457bp yoy and 1,236bp qoq to 39% due to lower fuel costs at 49% of net sales. Net profit rose by 124.9% yoy to `81.2cr on account of a surge in operating profit and net tax gains of `21.4cr for the quarter due to tax adjustments of earlier years and deferred tax income.
Outlook and valuation: We expect GIPCL’s top line and bottom line to log CAGRs of 21.9% and 20.0% over FY2011–13, respectively. At the CMP of `85, the stock is trading at 0.8x FY2013 P/BV. We have assigned a P/BV of 0.9x on FY2013 book value to arrive at a target price of `94. We recommend Accumulate on the stock.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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