NHPC - In line; Retain Buy - Emkay

Reco: BUY
CMP: Rs22
Target Price: Rs26

- 2Q13 APAT at Rs7.4b (up 14% yoy), slightly below our est. of Rs7.6b; adjusted - i) Rs0.8b of prior yr sales, ii) Rs0.2b of cost related to Chutak (part capitalized) but no revenues booked

- Factored commissioning of 471MW (Chamera III and Uri II) in FY13E and 511MW in FY14E driving regulated equity growth of 16% and 20% in FY13E and FY14E respectively

- Despite NHPC's 18% out performance vs. NTPC/PGCIL in past 3 mths, we continue to prefer NHPC given 1) ROE adjusted valuation discount still high at 35% and 2) upside triggers

- Upside triggers - 1) against no comm. in 2yrs, commissioned 231MW Chamera III & every 3-6mths comm. lined up and (2) high probability of CERC allowing 1% higher ROE; Retain Buy

Source : Equity Bulls

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