GMR Infrastructure - Nirmal Bang Institutional

- GMR Infrastructure's (GIL) 1QFY14 EBITDA at Rs5.95bn was flat YoY, but 23%/14% below our/Bloomberg consensus estimates, respectively, primarily because of poor performance of the power generation division due to higher fuel costs of newly commissioned plants during their stablisation stage and no supply of linkage coal.

- Consequently, the company suffered a net loss of Rs3.26bn (above our/Bloomberg consensus estimates of a net loss of Rs1.9bn/Rs790mn, respectively). We have realigned our earnings estimates to factor in the poor performance of the power generation division.

- Consequently, we expect net loss in FY14 of Rs2.5bn (against our earlier estimate of a net profit of Rs1.6bn) and have reduced our FY15 net profit estimate by 64% to Rs770mn and cut the target price on GIL from Rs25 earlier to Rs20, but retained our Buy rating on it.

Source : Equity Bulls

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