Nov 09, 2016

Energy - Renewable Energy - Renewable Energy Project Dev Ujaas Energy Ltd

Company Update Ujaas Energy Ltd

Bloomberg Code: UJEL IN

India Research - Stock Broking

BUY
Strong Foray in to Domestic Rooftop Segment Recommendation (Rs.)
The company has reported sales numbers of Rs. 1212mn showing a growth CMP (as on Nov 08, 2016) 35

of 129.9% YoY. The first half sales numbers came to Rs. 2149mn showing an Target Price 47
exponential growth of 233.3%. The EBITDA numbers came in at Rs.184mn for Previous Target Price 32
Q2FY17 representing 47.7% growth YoY with EBITDA margins declining by 843bps Upside (%) 36
YoY and reaching to 15.1% majorly due to focus on EPC based business. Stock Information
Roof top solar business: The company was continuously trying to gain the Mkt Cap (Rs.mn/US$ mn) 7000 / 105
traction in this market and with its continuous efforts, the company has made a 52-wk High/Low (Rs.) 40 / 15
strong and long term foray into the home roof top solar segment with an order 3M Avg. daily volume (mn) 1.7
win from Uttrakhand Renewable Energy Development Authority (UREDA) for Beta (x) 1.1
installation on 364 houses. Government has a goal of achieving 100Gw of solar Sensex/Nifty 27597 / 8542
capacity by 2022 with only 4GW of installed capacity as of now. Out of 100GW solar O/S Shares(mn) 200.0
capacity to be installed, 60GW will be from roof top solar segment. India currently Face Value (Rs.) 1.0
has 1GW of installed capacity under roof top segment. The company is expecting Shareholding Pattern (%)
at least 15MW of solar roof top business by FY18E.
Promoters 70.7
Strong Order Book: The company has commissioned 34mw of solar plants FIIs 0.0
(across all segments) during H1FY17. The company currently has a 20mw of order DIIs 1.7
book which shall be completed within 3 to 6 months. The company also has a Others 27.6
strong bid book of 80mw, where in majority of the orders the company stands a
L-1 position. The companys management is confident of achieving installation of Stock Performance (%)
80mw of solar power plant by the end of FY17E which could boost the revenues to 1M 3M 6M 12M
Rs.5000mn as per their estimates. Absolute 46 45 53 113
Relative to Sensex 53 53 47 109
Valuation and Outlook Source: Bloomberg

The outlook for the companys business looks positive for coming years. We expect
Relative Performance*
the company to bag new orders in the coming quarters which exhibit huge potential
230
to grow. We expect the revenues to grow at 49.9% CAGR with EBITDA growing at 190
12.8% CAGR during FY16-18E. We value the company at 26.5x of FY18E EPS with 150
BUY rating and arrive at upwardly revised target price of Rs. 47 with a potential 110
upside of 36% for a period of 12-15months. 70
May-16
Feb-16
Mar-16
Nov-15
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Jul-16
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Nov-16
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Oct-16
Jan-16

Jun-16

Key Risks
yyFinancial stress of state discoms.
Ujaas Energy Limited Sensex
yyLack of strict enforcement of Renewable Purchase Obligations (RPOs).
Source: Bloomberg; *Index 100

Exhibit 1: Valuation Summary

YE Mar (Rs. Mn) FY14 FY15 FY16 FY17E FY18E
Net Sales 5255 1111 2771 4154 5027
EBITDA 914 423 625 667 796
EBITDA Margin (%) 17.4 38.1 22.6 16.1 15.8
Adj. Net Profit 374 117 209 274 365
EPS (Rs.) 2.1 0.6 1.0 1.4 1.8
RoE (%) 23.0 6.8 10.9 11.2 12.0
PE (x) 5.6 33.6 21.7 25.2 18.9
Source: Company, Karvy Research; *Represents multiples for FY14, FY15 & FY16 are based on historic market price
Analyst Contact
Ankit Soni
For private circulation only. For important information about Karvys rating system and other disclosures refer
to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>, 040 - 3321 6274
Thomson Publishers & Reuters soni.ankit@karvy.com

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Ujaas Energy Ltd

Exhibit 2: Q2FY17
YE Mar (Rs. Mn) Q2FY17 Q1FY17 QoQ(%) Q2FY16 YoY(%) H1FY17 H2FY16 YoY(%)
Turnover (net) 1212 937 29.3 527 129.9 2149 645 233.3
Op. Expenditure 1028 783 31.3 403 155.3 1811 418 333.0
EBITDA 184 154 19.3 124 47.7 337 226 49.1
Depreciation 20 20 2.7 20 1.9 40 40 1.1
Interest 53 43 22.8 34 57.0 97 69 39.4
Other Income 14 17 (17.2) 6 155.0 32 9 235.8
PBT 124 108 15.0 76 63.6 232 127 83.5
Tax (net) 27 36 (23.4) 43 (37.0) 63 80 (21.1)
PAT 97 73 33.8 33 196.0 170 47 260.1
EBITDA Margin (%) 15.1 16.4 (127) bps 23.6 (843) bps 15.7 35.1 (1940) bps
EBIT Margin (%) 14.7 16.2 (150) bps 20.9 (620) bps 15.3 30.4 (1509) bps
PAT Margin (%) 8.0 7.7 27 bps 6.2 179 bps 7.9 7.3 59bps
Source: Company, Karvy Research

Key Takeaways of Conference Call:

yyTarget to commission 80mw: UEL is targeting to achieve 80mw of solar power plant by end of FY17E. The company has
already commissioned 34mw of solar power plants by H1FY17.

yyThe company has bagged the order to setup roof top solar power plant for 365 homes from Uttarakhand Renewable Energy
Development Agency (UREDA). The company expects to gain more orders in the roof top segment and targets to setup solar
power plants in around 1000 houses by the end of FY17E.

yyCurrent order book of the company stands at 20mw to be delivered within 3-4 months. The bid book numbers come at 80mw
where in the company stands at L-1 level.

yyThe company expects to do a total business of 5GW by FY22E.

yyThe company has a total debt of Rs.950 Mn as on date.

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Ujaas Energy Ltd

Financials

Exhibit 3: Income Statement

YE Mar (Rs. Mn) FY14 FY15 FY16 FY17E FY18E
Revenues 5255 1111 2771 4154 5027
Growth (%) 116.7 (78.9) 149.4 49.9 21.0
Operating Expenses 4341 688 2146 3487 4230
EBITDA 914 423 625 667 796
Growth (%) 101.5 (53.7) 47.8 6.7 19.4
Depreciation & Amortization 47 81 80 86 86
Other Income 76 22 23 22 23
EBIT 944 364 569 603 733
Interest Expenses 91 180 155 161 145
PBT 853 184 414 442 588
Tax 479 67 205 168 223
Adjusted PAT 374 117 209 274 365
Growth (%) 38.5 (68.6) 77.9 31.3 32.9
Source: Company, Karvy Research

Exhibit 4: Balance Sheet

YE Mar (Rs. Mn) FY14 FY15 FY16 FY17E FY18E
Cash & Equivalents 654 160 685 426 600
Sundry Debtors 1770 824 1173 1480 1721
Inventory 423 637 819 778 1047
Loans & Advances 170 123 143 150 158
Investments 10 20 261 261 261
Net Block 1907 1830 1761 1835 1887
Miscellaneous 32 39 74 75 75
Total Assets 4966 3634 4917 5007 5751
Current Liabilities & Provisions 1754 498 1536 1186 1417
Debt 1203 994 931 851 776
Other Liabilities 381 408 527 527 528
Total Liabilities 3338 1901 2994 2564 2720
Shareholders Equity 200 200 200 200 200
Reserves & Surplus 1428 1533 1724 2243 2830
Total Networth 1628 1733 1924 2443 3030
Total Networth & Liabilities 4966 3634 4917 5007 5751
Source: Company, Karvy Research

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Ujaas Energy Ltd

Exhibit 5: Cash Flow Statement

YE Mar (Rs. Mn) FY14 FY15 FY16 FY17E FY18E
PBT 853 184 414 442 588
Depreciation 47 81 80 86 86
Interest 91 180 155 161 145
Inc/dec in Net WC (459) (311) 477 (624) (328)
Other Income (46) (21) (18) (20) (23)
Other non cash items 0 (0) (6) (2) (2)
Tax (98) (170) (65) (42) (56)
Cash flow from operating activities 388 (57) 1037 1 410
Inc/dec in capital expenditure (1061) (4) (12) (15) (15)
Inc/dec in investments (10) (11) (241) 0 0
Others (235) 360 (515) 20 23
Cash flow from investing activities (1306) 345 (768) 5 8
Inc/dec in borrowings 1054 (216) (63) (80) (75)
Dividend paid (23) (47) (30) (24) (24)
Interest paid (91) (180) (155) (161) (145)
Cash flow from financing activities 939 (443) (248) (265) (244)
Net change in cash 21 (155) 21 (259) 174
Source: Company, Karvy Research

Exhibit 6: Key Ratios

YE Mar FY14 FY15 FY16 FY17E FY18E
EBITDA Margin (%) 17.4 38.1 22.6 16.1 15.8
EBIT Margin (%) 18.0 32.8 20.5 14.5 14.6
Net Profit Margin (%) 7.1 10.6 7.5 6.6 7.3
Dividend Payout Ratio (%) 9.7 8.5 7.7 7.3 5.5
Net Debt/Equity (x) 0.3 0.5 0.1 0.2 0.1
RoE (%) 23.0 6.8 10.9 11.2 12.0
RoCE (%) 28.6 17.2 18.9 17.8 16.8
Source: Company, Karvy Research

Exhibit 7: Valuation Parameters

YE Mar FY14 FY15 FY16 FY17E FY18E
EPS (Rs.) 2.1 0.6 1.0 1.4 1.8
DPS (Rs.) 0.2 0.1 0.1 0.1 0.1
BVPS (Rs.) 127.9 84.7 80.7 63.3 79.3
PE (x) 5.6 33.6 21.7 25.2 18.9
P/BV (x) 0.1 0.2 0.3 0.5 0.4
EV/EBITDA (x) 3.1 11.4 7.6 11.0 8.9
EV/Sales (x) 0.5 4.3 1.7 1.8 1.4
Source: Company, Karvy Research; *Represents multiples for FY14, FY15 & FY16 are based on historic market price

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Ujaas Energy Ltd

Stock Ratings Absolute Returns

Buy : > 15%
Hold : 5-15%
Sell : <5%

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