We don't find anything electrifying in Reliance Power after the RIL and RNRL agreement as the project is still years away.
Our calculations indicate that the benefits of gas supplies are already in the price as our 12m SOTP-based TP of Rs119 reflects value for about
10.3GW of gas based capacity at Dadri and Shahapur, after applying milestone discounts of about 40%. Even if we remove the milestone discounts, our valuation of RPWR would increase to Rs133/share which is still 20% below the current market price. We retain Sell on RPWR, implying 29% potential downside.
