Reliance Power - Result Update - Emkay

Reco: BUY
CMP: Rs 107
Target Price: Rs 155

Continues to deliver on timelines; Reiterate buy

- PAT of Rs2.04bn above estimates on better profitability at Rosa and higher other income

- Factor in better profitability from Rosa and higher other income in FY12E (upgrade earnings by 16%) but maintain our FY13E earnings

- 3Q progress – (1) Rosa unit 3 commissioned, (2) Sasan coal mine- own equipments also put to work; considerable overburden removed, (3) Indo mines - JORC report for IInd block and trial barge transportation and (4) Tilaiya mine R&R initiated and section 24 notification in exp. In next 2 months

- Building solidity - (1) huge cheap captive coal, (2) merchant capacity in captive coal plants only, (3) plants near load centers (PoC), (4) minimizing cost of capital & (5) low to reasonable tariffs - offtake and payment risk minimized

- Solidity & positive triggers ignored with stock at 30% discount to fair value. Foresee RPL as the most sustainable private power utility; Reiterate 'Buy' with TP of Rs155/Share.

Source : Equity Bulls

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