Credit Suisse maintains 'underperform' on Adani Power

MUMBAI: Credit Suisse has maintained its underperform rating on Adani Power, while cut its target price to Rs51 from Rs56 after the company's 2011-12 results disappointed.

"Adani Power reported a recurring loss of Rs924 mn versus our expectation of Rs6.9 bn profits. We are also concerned by its over 4x gearing now," said Credit Suisse analysts, Amish Shah and Abhishek Bansal in a note to clients. "Led by these issues, we expect the stock to remain weak," they said.

Adani Power shares rose 1% to end at Rs 51 on Friday. The broker has cut its earnings per share estimates for in 2012-13 by 50% and in 2013-14 by 19%.

"We believe that Adani Power's fuel visibility is deteriorating as its request to source 30% coal for its Mundra I-III imported coal-based projects from Coal India is still pending, there is no visibility on clearance of its captive coal block for Tiroda-I project and Tiroda-II and Kawai projects of 1.32 GW each are unlikely to be allocated coal until Mar 2017, given they lack LoA," the analysts said.