Hi Sachit,
I have done some very basic IRR calculations at various capacity utilization levels for ENIL’s existing frequencies (renewal) and new frequencies and in all the cases, the IRR with reasonable assumptions (based on past track record) is much higher than one indicated by the management. Thus, it is very hard to believe for me that ENIL is working with 16% IRR unless my assumptions somewhere is materially wrong. My feel is that 16% post tax IRR is based on very conservative assumptions and there is good upside left. Also, management has mentioned that 16% is project IRR and equity IRR is likely to be much higher than that.
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