Power(hydro)Sector.Who Perform Well

kam2011 · 1 Power(hydro)Sector.Who Perform Well Fri Jun 24, 2011 1:46 pm

kam2011

Senior Manager - Equity Analytics

Posts : 554
Equity Stars : 5648
Reputation : 52
Join date : 2011-03-24

Dear friends, Shall we look at the Hydro Power sector. There are 4 listed companies which are purely engaged in hydro power generation. I did a brief comparison of performance of those companies based on last financial reports (year ending 31.03.2011)and findings are given below;

HYDRO POWER

Revenue =Rs. 135.20mln
Profit after tax =Rs. 70.40mln
No. of Shares = 109.10mln
EPS =Rs. 0.65
Market Price(11.50am/24th june)=Rs. 13.10
PE = 20.1
NAV = 7.89
Dividend = not yet

PAP

Revenue =Rs. 223.3mln
Profit after tax =Rs. 120.4mln
No. of Shares = 500.0mln
EPS =Rs. 0.33
Market Price(11.50am/24th june)=Rs. 5.00
PE = 15.1
NAV = 1.70
Dividend = 0.25(interim-june)

VLL

Revenue =Rs. 362.8mln
Profit after tax =Rs. 170.0mln
No. of Shares = 432.8mln
EPS =Rs. 0.39
Market Price(11.50am/24th june)=Rs. 7.40
PE = 18.97
NAV = 2.17
Dividend = 0.10(interim-may)
0.10(interim-june)

VALIBEL

Revenue =Rs. 553.6mln
Profit after tax =Rs. 422.2mln
No. of Shares = 747.1mln
EPS =Rs. 0.56
Market Price(11.50am/24th june)=Rs. 10.10
PE = 18.0
NAV = 2.43
Dividend = 0.20(interim-jan)

Hemas power has not taken for this study since major potion of revenue and profit comes from thermal power.According to this study best PE as per price at 11.50 am today has reported by PAP.
For Your comments pl.

Monster · 2 Re: Power(hydro)Sector.Who Perform Well Fri Jun 24, 2011 2:09 pm

Monster

Senior Vice President - Equity Analytics

Posts : 1708
Equity Stars : 8377
Reputation : 279
Join date : 2011-01-22

Good work kam2011. All in one.

You have excluded HPWR since it's major revenue is from thermal power. Otherwise it's the attractive in the sector.

If you look at HPFL (as of 31.03.2011) it's IPO money is almost unused. They may acquire or start new hydro power plants in future. But it's fairly valued.

Companies in this sector should trade lower PER as it's profit is volatile due to whether condition in the country.

UNI · 3 Hw cn I get these information...? Sat Jun 25, 2011 3:21 pm

UNI

Senior Equity Analytic

Posts : 64
Equity Stars : 5018
Reputation : 2
Join date : 2011-06-10

like EPS,no of shares,revenue..

kam2011 · 4 Re: Power(hydro)Sector.Who Perform Well Sun Jun 26, 2011 11:07 pm

kam2011

Senior Manager - Equity Analytics

Posts : 554
Equity Stars : 5648
Reputation : 52
Join date : 2011-03-24

Uni, I got them from my broker's website and www.cse.lk. pl try.

kam2011 · 5 Re: Power(hydro)Sector.Who Perform Well Sun Jun 26, 2011 11:18 pm

kam2011

Senior Manager - Equity Analytics

Posts : 554
Equity Stars : 5648
Reputation : 52
Join date : 2011-03-24

monster,You are correct their EPS is 3.30 and PE is around 9.50. But the problem is what would be the future? Hemas power hydro power capacity is below 7%. Acccording to their last annual report hydro capacity is only 7 mw whereas the thermal power capacity is 100mw. The future of the privete thermal power generating business is not bright as per present power policy of the govt. When coal power unit nis fully operational, CEB wii reduce drasticaly purchase of costly thermal power from the private sector.

Monster · 6 Re: Power(hydro)Sector.Who Perform Well Sun Jun 26, 2011 11:59 pm

Monster

Senior Vice President - Equity Analytics

Posts : 1708
Equity Stars : 8377
Reputation : 279
Join date : 2011-01-22

kam2011 wrote:monster,You are correct their EPS is 3.30 and PE is
around 9.50. But the problem is what would be the future? Hemas power
hydro power capacity is below 7%. Acccording to their last annual report
hydro capacity is only 7 mw whereas the thermal power capacity is
100mw. The future of the privete thermal power generating business is
not bright as per present power policy of the govt. When coal power
unit nis fully operational, CEB wii reduce drasticaly purchase of costly
thermal power from the private sector.

I am not an expert in this sector. Currently they have 4.6 MW connected to the national grid and another 2.4 MW is under construction to be connected to the national grid in September this year. To be honest, I have no idea about the future of the thermal power plant.

kam2011 · 7 Re: Power(hydro)Sector.Who Perform Well Mon Jun 27, 2011 11:21 pm

kam2011

Senior Manager - Equity Analytics

Posts : 554
Equity Stars : 5648
Reputation : 52
Join date : 2011-03-24

My point is when we analyse this sector we have to give higher waight to renewable energy mainly for hydro. We everybody knows that due to ever increasing oil price thermal power genwrwtion is going to be more expensivve and CEB cant absorb so much of losses. That is why they have gone for their own coal power plant. Once it is fully operational they can easily reduce purchase of thermal power from private power companies;. That is the reason that Aitken Spence is surching oppotunities in other countries(from some news item I came to know about it)May be considering relocation of the plant.According to some news their power purchase agreement is over by 2012( Pl. correct me if I am wrong)