Brokerage house Emkay Global Financial Services is bearish on JSW Energy and has recommended sell rating on the stock with a target price of Rs 52 in its July 23, 2014, research report.
>> PAT of Rs3.25bn broadly in-line with our estimate of Rs3.59bn, after adjusting for higher tax in reported numbers. Operational performance also in line; upgrade FY15 earnings by 6%, factor higher PLFs (Vijaynagar) and lower fuel costs
>> Expect stock to remain strong in the near-term on good results; and lower coal prices (down by 8% over the past 1 month), higher Barmer tariff (Rs4.06/u vs Rs3.75/u earlier), and Southern region capacity now fully tied up for FY15
>> Beyond FY15 we see downside risks to earnings resulting from lower PLFs and merchant prices. Given the downside risks, the stock at 10x FY15E EPS looks expensive
>> We maintain our Sell rating with a TP of Rs 52 given the EPS downgrade risks and poor visibility on earnings beyond FY15. Key risks: a significant uptick in merchant prices, unlikely in our view, and/or final Barmer tariff above Rs4.06/unit
"With the southern grid connectivity materializing in 2H15 and capacity additions, visibility beyond FY15 remains poor. We would ideally turn long term positive on the stock if it signs up cost-plus PPA, especially for Ratnagiri and also for Vijaynagar. Beyond FY15 we see significant downside risks to FY16E consensus earnings (our EPS is 20% lower), resulting from lower PLFs and lower merchant prices as per our power model. With stock at 10x FY15E EPS, looks expensive and we maintain our Sell rating with a target price of Rs52/share, given the EPS downgrade risks, coupled with the commodity business model and the poor visibility on earnings for FY16 and beyond. Risk to our call would be: (1) significant up-tick in merchant prices, though unlikely in our view, and/or (2) final Barmer tariff in excess of the current approved Rs 4.06/unit", says Emkay Global Financial Services research.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Anda sedang membaca artikel tentang
Sell JSW Energy; target of Rs 52: Emkay
Dengan url
http://harmonisem.blogspot.com/2014/07/sell-jsw-energy-target-of-rs-52-emkay.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Sell JSW Energy; target of Rs 52: Emkay
namun jangan lupa untuk meletakkan link
Sell JSW Energy; target of Rs 52: Emkay
sebagai sumbernya
0 komentar:
Posting Komentar