We raise our FY13E/14E earnings estimates by 13%/4% to PRs6.16/PRs6.89 after factoring in recent exchange rate weakness and lower O&M costs.
However, we lower our FY12E estimate to PRs5.84/sh (-1%) owing to lower plant generation in 4Q. We reiterate Buy with a new PO of PRs18.0/sh (+2.2%).
Possible inking of side agreements with GoP remains a possibility in the near-term which would enable the company to remain insulated from imposition of LDs for non-availability of capacity.
We assign low risk to NCPL skipping 2HFY12 cash payout despite ongoing liquidity strain. We have based our expectation on likely future cash injection in the energy sector.
Our conviction on NCPL remains intact, with the stock offering highest in-peers FY13E D/Y (20%) along with implicit PRs/US$ IRR of 23%/19% at current levels.
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