Bad Part

1) Bad Sector – It is marked by very high working capital,low margins,high competition and volatility in raw material prices.While Cantabil has grown well,the sector is hardly to excite someone about.The company’s expansion plans will need lead to any dramatic improvement in its business model.


There is nothing to dislike about the company,however there is nothing to like about it either.Valuation at around 12x is not expensive however the risks of the sector and the smallness of the company does not make it very cheap either.Manufacturing in house,reduction of working capital might make it attractive later on. However I would give it a pass as there are better opportunities around.

Earthquake Vulnerability – Large Dam Construction has been linked to increased propensity of Earthquakes.Massive Earthquakes in China and Uttarakhand in India were linked to the building of Massive Dams in these countries.Building of Massive Man Made Structures along geologically sensitive areas has not been properly studied and understood till now


While Hydro Power is a necessity for an energy starved and growing economy like India,its effect have to be properly assessed and understood before going on a hydro binge.NTPC lost almost $300 million after its 600 MW project was canceled 5 years after getting permission.This was done in the face of large scale protest by local groups and NGOs.2 other projects in Uttarkhand have also been rejected leading to more losses.

US Energy Utilities have been buying up Green Companies at a rapid clip these days taking advantage of the fall in valuations of Green Companies recently.Exelon bought Deere’s Wind Assets while NRG Energy bought Green Mountain Energy.Constellation Energy already has around 10% of its 9 GW of Electricity Capacity being sourced from Green Sources.Its Smart Grid buy is synergistic to is Energy Trading Core Business.It will help in expanding its customer base and sourcing new opportunities.For CPower Investors which are mainly PE players,it would be a good exit as competition in the Demand Response is increasing .

Orient Green Power Ltd (OGPL) is Indias 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 will issue around Rs 900 crores (~$180mm) which will result in a market cap of $450mm.OGPL is a relatively new company setting up and acquiring most of its 200 MW capacity in the last year which comprised of 152 MW of Wind Energy and the rest is Biomass Energy.The company plans to increase this capacity 4 fold to around 1000 MW in the next couple of years with Power Plants in India,Europe and Sri Lanka.The centrepiece of this expansion will be a 300 MW Wind Energy Plant in Tamil Nadu for which $10 million has been already been spent.The company’s past profits and cash flow have been negative which is not exactly a concern given that most of the capacity was set up in the last year or so.I like the company’s growth plans and the sector in which it operates.India suffers from a huge power deficit and Renewable Energy is being heavily promoted through Government Subsides and Renewable Energy Madates by the CERC.Trading of Renewable Energy Certificates (RECs) should start in a year or so giving additional revenue streams to Green Energy Producers.Here are the pros and cons of the issue

Renewable Energy SMA Solar raises revenue guidance a second time: expects PV market to top 17GW in 2010 – PV-Tech Gigawatt scale: CEC approves Solar Millennium’s planned 1GW Blythe CSP power plant – PV-Tech Suzlon Energy looks towards Middle Kingdom as a Panacea to all its Ills but can China Resurrect the Company Despite US […]

Nokia’s Stock Price has fallen by more than 50% in the last 2 years and have stayed at the same level despite a huge 40% Global Mobile Marketshare.Despite a Tech Resurgence,Nokia’s stock has wallowed in its all time lows.Repeated Restructuring,Losing out to competition in India,Failure to keep up with Apple has made this a “pity stock”.However its recent deal with Intel to launch Meego,a new CEO and N8 had given hopes to Nokia Faithful.However teething problems like the exit of the Smartphone Chief and delays in N8 has made those hopes recede.Also Nokia has unresolved Software issues as it tries to balance between 2 competing platforms of Symbian and Meego.It has decide on 1 platform and put all its effort there.Customers are cagey about buying phones with Operating Systems without a large Developer Support and Apps.The Ovi Store with just 13k apps is no match to iPhone’s 250k apps.Its time for Nokia to put renewed efforts in order to resurrect its declining fortunes.