• Login
  • Home
  • Pakistan
  • International News
  • Business
  • Sports
  • Entertainment
  • Opinion
No Result
View All Result
  • Home
  • Pakistan
  • International News
  • Business
  • Sports
  • Entertainment
  • Opinion
No Result
View All Result
Time of Pakistan
No Result
View All Result
Home Business Markets

Nishat Power Limited: Operational savings leading the way!

ToP by ToP
December 31, 2010
in Markets
0
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter
  • Phenomenal 1QFY11 results: While headline 1QFY11 EPS at PKR0.16 was a disappointment, details revealed 1Q revenues would have been PKR580mn (PKR1.64/share) higher as per revised tariffs. Adjusting the incremental revenues for share of 4QFY10 (in which plant was operational for 22 days) yields 1QFY11 EPS at PKR1.48.
  • Operational savings evident: 1QFY11 earnings (based on revised tariff) at PKR1.48/share, was more than 3.5x higher than IRR implied quarterly EPS of PKR0.42, suggesting substantial operational savings. We estimate that 1QFY11 fuel savings clocked in at 5.3gms/kwh, whereas actual O&M expense was 81% lower than the amount allowed as per tariff. We now conservatively factor in efficiency savings of 5gm/kwh (3.5gms/kwh from FY12 onwards) and O&M savings at 50%.
  • Higher operational savings to offset downward revision in debt component: Nepra re notified NPL’s tariff on Oct 15, 2010 lowering its debt component by 11.2%. However, we estimate operational savings to more than offset the impact of downward revision in debt component. We thus raise our FY11-13 EPS by 41-56% and DPS by 52-77%.

  • PT revised up to PKR20/share… Incorporating operational savings and reduction in debt component of tariff, we have revised our December-11 PT upwards to PKR20/share. We now assume an equity risk premium of 9% for NPL, 1.5x our market risk premium. At current levels, the scrip offers an upside potential of 24%, FY11E dividend yield of 24% and a USD IRR of 24% over the life of the project. BUY!
  • But we don’t rule out risk of adverse tariff adjustments in future: Our base case estimates of operational savings suggest that NPL would yield project USD IRR of 27% to sponsors (which further rises to 35% as per savings reflected in 1Q accounts), much higher than policy IRR of 15% for these projects. We hence foresee high risk of reduction in cost components of the tariff structure in the future.

We will be releasing short report soon.


Economic & Political News

Used cars: Uncertainty remains over reduction in age limit for imports

Prime Minister Yousaf Raza Gilani was quoted by a small section of media as saying that the government wanted to withdraw its earlier decision allowing import of five-year-old cars. The government has not issued any notification revoking its earlier decision that increased the age limit for imported cars from three to five years. Uncertainty prevails because the government has abruptly withdrawn from its previous move.
Analyst Certification:
The research analyst(s) denoted AC on the cover of this report, primarily involved in the preparation of this report, certifies that (1) the views expressed in this report accurately reflect his/her personal views about all of the subject companies/securities and (2) no part of his/her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
Disclaimer

The report has been prepared by Elixir Securities Pakistan (Pvt.) Ltd and is for information purpose only. The information and opinions contained herein have been compiled or arrived at based upon information obtained from sources, believed to be reliable and in good faith. Such information has not been independently verified and no guaranty, representation or warranty, expressed or implied is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as, an offer, or solicitation of an offer, to buy or sell any securities or other financial instruments.
Research Dissemination Policy
Elixir Securities Pakistan (Pvt.) Ltd. endeavors to make all reasonable efforts to disseminate research to all eligible clients in a timely manner through either physical or electronic distribution such as mail, fax and/or email. Nevertheless, not all clients may receive the material at the same time.
Company Specific Disclosures
Elixir Securities Pakistan (Pvt.) Ltd. may, to the extent permissible by applicable law or regulation, use the above material, conclusions, research or analysis in which they are based before the material is disseminated to their customers. Elixir Securities Pakistan (Pvt.) Ltd., their respective directors, officers, representatives, employees and/or related persons may have a long or short position in any of the securities or other financial instruments mentioned or issuers described herein at any time and may make a purchase and/or sale, or offer to make a purchase and/or sale of any such securities or other financial instruments from time to time in the open market or otherwise. Elixir Securities Pakistan (Pvt.) Ltd. may make markets in securities or other financial instruments described in this publication, in securities of issuers described herein or in securities underlying or related to such securities. Elixir Securities Pakistan (Pvt.) Ltd. may have recently underwritten the securities of an issuer mentioned herein.
Other Important Disclosures
Foreign currency denominated securities is subject to exchange rate fluctuations which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk. Foreign currency denominated securities is subject to exchange rate fluctuations which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk.

Contributed By

Previous Post

New Year Honours for Lennox, Suchet, Hancock and Webb

Next Post

David Cameron says spending cuts tough but necessary

ToP

ToP

Related Posts

Pfizer, AstraZeneca vaccine one dose cuts household spread 50%: study
Markets

Pfizer, AstraZeneca vaccine one dose cuts household spread 50%: study

by Jameel Ahmad
July 14, 2021
Russian Vaccine gets Emergency use Authorisation
Markets

Pakistan Among First Countries to Market Coronavirus Vaccine Shots Privately

by Jameel Ahmad
February 15, 2021
Inflation
Markets

Pakistan Inflation at Lowest Level in two Years

by Jameel Ahmad
February 2, 2021
Experts hope for a Reset in US-Pakistan Ties
Markets

Experts hope for a Reset in US-Pakistan Ties

by Jameel Ahmad
January 13, 2021
Oil Crisis Probe calls for Disbanding Ogra
Markets

Oil Crisis Probe calls for Disbanding Ogra

by Jameel Ahmad
December 15, 2020
Cabinet set to Take ‘policy decision’ on Ties with France
Markets

Cabinet set to Take ‘policy decision’ on Ties with France

by Jameel Ahmad
November 30, 2020
UAE Visa Suspension Related to Covid: FO
Markets

Fears of Pakistan Losing Job Market to India grow after UAE Visa Ban

by Jameel Ahmad
November 26, 2020
Next Post

David Cameron says spending cuts tough but necessary

Popular Stories

    Time of Pakistan

    About Times Of Pakistan

    kralbetbetturkeyikimislibahis1xbetm.infohipas.infohttps://www.wiibet.com/restbetcdn.com

    Other Categories

    • Beautiful Pakistan
    • Fashion News
    • Funny News
    • Viral Videos
    • Weird News

    Recent Posts

    • 11th J.A. Zaman Memorial Open – Powered by Gem Golfers
    • Imran Khan and Bushra Bibi Sentenced to Jail in £190 Million Case
    • World’s Largest Submarine Cable Arrives in Pakistan: Could This End Internet Woes?

    Times Of Pakistan © 2024. Design & Developed by E2E Solution Providers.

    No Result
    View All Result
    • Home
    • Pakistan
    • International News
    • Business
    • Sports
    • Entertainment
    • Opinion

    Welcome Back!

    Login to your account below

    Forgotten Password?

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In