Neg forecast for Mudajaya's FY2014 topline (5085)

KUALA LUMPUR: OSK Research Sdn Bhd expected a negative growth of 34.9
per cent at Mudajaya Group Bhd's topline level for its financial year
(FY) 2014 forecast, with revenue and core earning forecasts at RM1.29
billion and RM342.7 million, respectively.

In a note today, OSK said, however, there were no changes to its financial years 2012 and 2013 forecasts.

"This (financial year 2014) will be primarily attributed to the expected completion of works on the Chhattisgarh site by FY13.

"Its core earnings, on the other hand, are expected to inch up by 3.1 per cent from FY13," it said.

It
said the positive growth will be raised from the full-year contribution
of the RKM Powergen's independent power producer operations in India,
which was expected to bring in some RM95.3 million in FY14.

"Overall,
the latest developments in India's coal and power industry remain
somewhat inconclusive but we see some upside in the potential coal
price pooling model as an alternative should domestic coal production
falls short," it said.

OSK said it will continue to take a
cautious stance on Mudajaya pending the signing of the fuel supply
agreement between RKM Powergen and Coal India Ltd.

"We believe
that this or the official implementation of coal price pooling, could
prove crucial in assuaging fears over state electricity boards'
reluctance to increase their tariffs, lacking an official directive
from Prime Minister's Office.

" All in, we maintain our
'neutral' call for now, at an unchanged fair value of RM2.88, pegged at
a 50 per cent discount," it said. -- BERNAMA