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Sunday, January 25, 2009

Reliance Power - Stock Report - Should You Buy Stocks Now?

Reliance Power (RPower), part of the Reliance Anil Dhirubhai Ambani Group (ADAG) disclosed a phenomenal rise in standalone net profit for the quarter ended December 2008.

During the quarter, the profit of the company rose up to 2.28 times to Rs 1,070.70 million from Rs 472.09 million in the quarter ended September 2008.

During the quarter, total income of the company rose 99.10% to Rs 1,275.62 million as against Rs 640.69 million in the previous quarter.

The company posted earnings of Rs 0.45 a share during the quarter, a 2.25 times rise over the previous quarter.

The company has started posting earnings and EPS too. Looking at 0.45 Rs per share EPS, PE stands out to be 217 at CMP of Rs.98 Total income rose by 99.10 % compared to just previous quarter. Now, as company would progress with planned projects, revenues would grow at faster pace. Rosa phase 1 is suppose tobe completed 6 months ahead of it's planned commissioning date. Revenues expected from this power plant stands at INR 3100 million. The forward PE with these earnings comes to 76. Compare this with current PE of 217 in current stock market (which is bearish). Verdict: As revenues would grow (which are bound to), investing in this counter can reap rich dividends and growth in coming years.

Key Takeaways
*** Net Profit for Q3 09 stands at INR 10.6 billion against INR 3.7 billion in Q2 09.

*** Other Income for Q3 09 stands at INR 13.1 billion against INR 5.7 billion in Q2 09.

*** Rosa Phase I, RPower's first power project is expected to commence operations from December 2009, 6 months ahead of schedule. 60% of the project work is completed and the balance is on track. We expect revenues from the project to stand at INR 3100 million approximately for FY10E.

*** The 600 MW Rosa Phase II project has been awarded coal linkage. The company is expected to achieve financial closure by Q4 2009.

*** Commissioning schedule of Sasan project has been advanced by three years from year 2016 to 2013. Supplementary Power Purchase Agreement has been signed in this regard with the procurers.

Checkout:Best stocks to buy from Indian power sector

Valuation
With commencement of projects targeted before schedule, fuel linkage for Rosa Phase II acquired, financial closures of 3 projects expected in Q4 09, getting clearances on a faster pace, we believe RPower is well on track to achieve its ambitious plan to become the second-largest power generator in India by adding about 30,840MW of capacity by FY16. The stock is currently trading at 74x FY10E EPS. We rate RPower as Outperformer.

FINANCIAL STATS
Shareholding Pattern (%)
Promoters 85.0
MF/Banks/Indian FIs 2.0
FII/ NRIs/ OCBs 4.0
Indian Public: 9.0
Mkt Cap 23,488.84 Cr.
P/E: 217 (cmp: Rs. 98)
Div: 0.00
EPS: (TTM) 0.45
B/V: 57.16
Mkt Lot: 1.00
FV: 10.00
Reliance Power - Stock To Buy ?
Download Detailed Source Report PDF

2 comments:

  1. Sir you are genius..
    I rate this blog as one of the top stock blog after krishna blog,keep the good work going,you are really doing great work of educating investor,you are god of knowledge.
    One request to you we are missing Q results,bal sheet,cash flow,debt ratio in your blog,if you add these it will be great for the investor.Thanks for adding the shareholding pattern.

    Sir you are genius...

    ReplyDelete
  2. is it fine if we buy kALPATARU POWER at this time..

    ReplyDelete

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