Reliance Power at new high

Reliance Power has hit a new 52-week high today at Rs.89.30, up 4%. The upper circuit limit is at Rs.94.45.

The stock has hit on the back of its very good performance for Q4FY14, which has beaten most of the estimates. The company reported a 9% (YoY) rise in consolidated revenue at Rs.1359 crore for Q4FY14. This rise in sales is also attributed to the robust other income of Rs.62 crore, absent in both Q3 as well as previous Q4. If one removes this other income, rise in net sales is by 4%. Its major expense remains power and fuel, which was up 9% (YoY) though sequentially, it was down 9%. Power and fuel is 82% of its total operating cost. EBITDA came in healthier at Rs.536 crore, up 15% and this was mainly on account of the halving of ‘other expenses’. EBITDA margin expanded 236 bps to 39.4%.

Finance cost for the quarter was up 6% at Rs.181 crore (Rs.684 crore for FY14) and tax outgo was at Rs.53 crore, down from Rs.60 crore in Q3 while in Q4Y13, it had a tax write back of Rs.31 crore. These two factors pulled down the net profit, which came in at Rs.269 crore, which is up 1% (YoY) and almost status quo QoQ, which was at Rs.267 crore.

The company ended FY14 with a consolidated net profit at Rs.1027 crore, up less than 2%. These numbers, though flat, are much better than what most analysts and brokerage houses had expected and this explains the spurt in share price.