KSK Energy - At an inflection point; maintain Buy - Emkay

- KSK at an inflection point of earnings growth which would start from 1Q14 driven by - 1) Wardha fuel cost, 2) normalized PLF in VS lignite, 3) normalized operations in Arasmeta II & 4) Mahanadi commissioning

- Expect EPS CAGR of 45% in FY13-15E & yet to factor 1) Wardha coal quality improvement, 2) lower interest, 3) tapering coal linkage till Morga II becomes operational and 4) 1GW UP bid Rs5.4/unit

- KSK recently received stage-II forest clearance for prospecting of Morga-II coal block

- Given EPS upgrade cycle 1Q14 onwards, stock attractive at 5.9x15E EPS & 0.5x15E book. Maintain Buy with a PT of Rs82/sh.

Source : Equity Bulls

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