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EARNINGS REVIEW
Orient Green Power (ORIN.BO)
Buy Equity Research
In line with expectations: Biomass mass fuel costs down qoq
What surprised us
Orient Green (ORIN.BO) reported 3QFY11 PAT of Rs50 mn vs. our estimate
of Rs10 mn. Adjusted for: 1) one-time item of Rs4.6 mn in interest expense
and 2) higher other income, profit before tax was about Rs12 mn, largely
in line with our expectations. The biomass fuel costs for 3QFY11 was
about Rs2.98/kwh vs. Rs4.82/kwh in 2QFY11, down 38% qoq. The fuel costs
in 2QFY11 were higher due to increase in fuel consumption on account of
unusual monsoons. The overall realization for 3QFY11 improved to
Rs4.64/kwh vs. Rs4.48/kwh for 2Q, due to higher proportion of third party
sales in its wind segment.
The total units sold for 3QFY11 was about 73mn units vs 131mn units in
2QFY11 due to seasonality and lower output from biomass segment on
account of shutdown of its Rajasthan plant for operational issues. While
there was no capacity addition in the biomass segment in 3QFY11, there
was a marginal increase of 7MW in the wind segment, taking the total
installed capacity in Wind to 179MW.
What to do with the stock
We have a Buy on OGPL with a 12-m SOTP based TP of Rs51, implying
potential upside of 113%. While decline in biomass fuel costs should
address some of investors’ concerns, we look forward to more details on
the management conference call on operating performance and status on
upcoming capacity additions. Key risks: Delays in future wind capacities
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
EARNINGS REVIEW
Orient Green Power (ORIN.BO)
Buy Equity Research
In line with expectations: Biomass mass fuel costs down qoq
What surprised us
Orient Green (ORIN.BO) reported 3QFY11 PAT of Rs50 mn vs. our estimate
of Rs10 mn. Adjusted for: 1) one-time item of Rs4.6 mn in interest expense
and 2) higher other income, profit before tax was about Rs12 mn, largely
in line with our expectations. The biomass fuel costs for 3QFY11 was
about Rs2.98/kwh vs. Rs4.82/kwh in 2QFY11, down 38% qoq. The fuel costs
in 2QFY11 were higher due to increase in fuel consumption on account of
unusual monsoons. The overall realization for 3QFY11 improved to
Rs4.64/kwh vs. Rs4.48/kwh for 2Q, due to higher proportion of third party
sales in its wind segment.
The total units sold for 3QFY11 was about 73mn units vs 131mn units in
2QFY11 due to seasonality and lower output from biomass segment on
account of shutdown of its Rajasthan plant for operational issues. While
there was no capacity addition in the biomass segment in 3QFY11, there
was a marginal increase of 7MW in the wind segment, taking the total
installed capacity in Wind to 179MW.
What to do with the stock
We have a Buy on OGPL with a 12-m SOTP based TP of Rs51, implying
potential upside of 113%. While decline in biomass fuel costs should
address some of investors’ concerns, we look forward to more details on
the management conference call on operating performance and status on
upcoming capacity additions. Key risks: Delays in future wind capacities
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