GIPCL - 1QFY2013 Result Update - Angel Broking

For 1QFY2013, GIPCL posted 28.0% yoy growth in Net Profit to Rs.55cr. The company's operating margin expanded by 75bp yoy to 38.2% due to higher PAF yoy at all units except Vadodara station I. PAF for Vadodara station I stood at healthy 95.4% for the quarter, although lower than 99.6% in 1QFY2012.

Strong operational performance: For 1QFY2013 GIPCL posted a 2.3% yoy growth in net revenue to Rs.349cr. The 250MW SLPP Station I (Comprising Unit-I & II of 125MW each) has been restored to normal operations, after repairing the damaged rotor. SLPP stations I and II reported higher PLF yoy at 90.7% (75.8% in 1QFY2012) and 89.6% (71.7% in 1QFY2012), respectively. Vadodara stations I and II operated at PLF of 58.8% (64.4% in 1QFY2012) and 34.0% (60.2% in 1QFY2012), respectively. Vadodara station II reported a lower PLF for the quarter due to low off-take. OPM improved by 75bp yoy to 38.2%.

Outlook and valuation: GIPCL is well placed in terms of fuel security, with the entire fuel requirement of 500MW SLPP stations I and II met from captive lignite mines. Further, power generated by the company has assured offtake through PPAs signed under the cost-plus model, ensuring RoE of 14% (excl. generation linked incentives) at 75% and 80% PAF for lignite and gas-based plants. At the CMP of Rs.66, the stock is trading attractively at 0.6x FY2014 P/BV. We have assigned a P/BV multiple of 0.7x on FY2014 book value to arrive at a target price of Rs.78. We maintain our Buy recommendation on the stock.

Source : Equity Bulls

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