Net generation for Q4FY16 was 6.2BU, an increase of 26% y-o-y aided by acquisition of Karcham and Baspa HEP in September 2015. Vijayanagar TPS net generation was 1.7BU (flat y-o-y) while Ratangiri TPS net generation was 2BU (+56% y-o-y). Barmer TPS net generation was 1.7BU. Baspa and Karcham hydro power plant generated 406MU.
Hydropower plant PLF was 14% in a seasonally weak quarter leading to a loss of Rs 730 million at hydro SPV during the quarter. Standalone EBITDA and PAT came in at R6.6 billion and R2.9 billion on account of better realisation from merchant sales during the quarter. Consolidated adjusted PAT for the quarter was R3.3 billion, ahead of our estimates of R2.7 billion owing to stellar performance on standalone basis which was offset by losses in hydro power SPV.
We expect earnings to get support from high merchant power prices, acquisition of Karcham and Baspa and pending order on transfer price of lignite and lower dependence on merchant prices. In view of the attractive valuations (7.3x FY18E earnings) and stable earnings profile over FY16-FY18E, we maintain ‘outperformer’ with a price target of R87.