Reliance Power Ltd - In line result; maintain Buy - Emkay

Reco: BUY
CMP: Rs 72
Target Price: Rs 116

- Reliance Power's (Rpower) 1Q14 APAT of Rs2.4bn was in line with estimates; Rosa continues to perform well with 100% availability (90% est.) and PAT of ~Rs2bn (Rs2.2bn in 4Q)

- CERC ordered repeat of tests for comm. of Sasan UMPP U1. RPWR challenged the decision in APTEL, outcome awaited. If outcome not in favor, it will lead to Rs3/sh NPV impact

- While Rpower's assets are reasonably good, earnings are bit back ended with major growth likely only in FY17. Also one has to take call on excess coal to turn constructive on stock

- We have reduced our FY15 EPS estimates by 21%. Maintain Buy with a long term view & a revised PT of Rs116/sh (removed Tilaiya and cut Indo. mine value). Key Risk: no value from excess coal assets.

Source : Equity Bulls

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