Orient Green Power – Buying time?
Orient Green Power which is one of the largest green focused utilities in India has shown a decent profit in the last quarter after an average performance since its IPO. Note Orient Green Power which mostly has capacities in wind energy and biomass had been facing issues with the supply of fuel for biomass and setting up the wind power plants. Wind Power in India has been facing a lot of issues recently with removal of incentives and problems in grid connectivity. However with most state governments looking at renewable energy to alleviate the problems of power blackouts, OGP may have just turned the corner. The company is looking to rapidly add wind and biomass power capacities as states like AP, Tamil Nadu, Punjab and Maharashtra are rolling out the red carpet for green energy investors. Note the advantages of biomass power have been overlooked by the governments which are mostly focusing on wind and solar energy for their scalability
More about Orient Green Power.
Orient Green Power Ltd (OGPL) is India’s Largest Green Utility and is one of the areas that is a good way to invest in India’s Green Energy Sector. The company is owned by the Shriram Group and a couple of PE Players. OGPL is a relatively new company setting up and acquiring most of its 200 MW capacity. The company plans to increase this capacity 4 fold to around 1000 MW in by 2013. The centerpiece of this expansion was 300 MW Wind Energy Plant in Tamil Nadu for which did not fructify.
OGP 2012 Update
In biomass power generation, the company plans to add about 45 MW during the current year taking its total installed capacity to about 106 MW. In wind power, the company has 337 MW of wind power generation capacity and is speeding up the commissioning of over 94 MW of wind power generation capacity in Andhra Pradesh as part of the 192-MW additional capacity to be added by the company in the year. During the second quarter ended September 30, the company reported a net profit of Rs 22.5 crore on an income of Rs 151 crore against last year’s second quarter’s net profit of Rs 1.9 crore on an income of Rs 70 crore.
Orient Green Power has crashed to almost 20% of its IPO price given the uncertainties in cash flows and execution. However the company has started showing profits and renewable energy focus of the government is a major plus factor. The company which had gone slow in project construction is speeding it up now. It might be a good time to get into the stock given the poor sentiment towards green energy in general. Note green stocks around the world have taken a massive beating and OGP has been no different.