Jaiprakash Power - Q3FY12 Result Update - Emkay

Reco: HOLD
CMP: Rs 45
Target Price: Rs 45

Fairly valued now; Downgrade to Hold

- 3Q12 PAT at Rs595mn - ahead of expectations driven by higher income from sale of VERs (Rs292mn) and higher merchant realizations (Rs4.7/unit) from Karcham

- Issues/overhang on JPVL - (1) huge funding gap for equity inv and to repay corporate debt, (2) uncertainty on Karcham offtake, (3) fuel availability and (4) captive mine under no-go

- Issues addressed - (1) few projects on hold - lower funding & fuel needs, (2) high court's order on Karcham & healthy internal accruals - easing of cash flows, (3) forest clearance of Nigrie mine in few mths & (4) use of captive coal for Bina

- Upgraded the stock to Buy post last qtr, it has outperformed nifty by 23% since. Do not see upside from these levels unless clarity emerges on (1) funding NCD repayment, (2) forest clearance for Dongri-tal II & (3) use of captive coal in Bina.

Source : Equity Bulls

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