Tata Power - Earnings in a fix; maintain Hold - Emkay

- 1Q13 APAT of Rs3.0bn, below estimates on account of (i) higher cash cost at Bumi ($49/ton vs. $41/ton in 1Q12), (ii) higher losses at Mundra.

- Coal EBIT dipped to 11% in 1Q13 marred by lower realization (expected) and higher cost (not expected); Mundra-blending at 70:30 ratio going forward (1Q13– 60:40); Maithon- 85% PAF to declare for 75% part, rail link work to start by Aug end.

- Consol earnings might remain in a fix in the mid-term driven by softening coal prices (net long coal); Led by higher mining cost, cut our FY13E/FY14E ests. by 4.7/4.6% respectively.

- In our view, lots of practical and legal challenges even if CERC approves petition to convert non-escalable component to escalable – very unlikely; Maintain Hold with PT of Rs95.

Source : Equity Bulls

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