ADANI POWER

RESEARCH: UBS INVESTMENT
RATING: BUY
CMP: RS 106
UBS Investment maintains `Buy’ rating on Adani Power with a price target of Rs 130. Adani Power (APL) has been awarded a letter of intent (LOI) by the Madhya Pradesh government to develop a 1,320-MW power project at Chhindwara. The project is like a Case 2 bid and has significant advantages for Adani Power in the form of: a) land availability, b) state government support for obtaining fuel linkages, c) water availability, and d) support for infrastructure facility by MP government. The project also has a good mix of regulated and open capacity. As per the LOI, the first unit of 660 MW is to be commissioned in Q2FY14 and the second unit by end-FY14. UBS believes Adani Power has made reasonable progress on this project as the company has already invited engineering, procurement and construction bids for the project. Developments in APL are similarly positive for its parent entity, Adani Enterprises (AEL); APL contributes about 62% of the price target of Rs 550 for AEL.

SOURCE: ET INTELLIGENCE