Oriana Power Ltd, a prominent player in solar energy solutions
Executive Summary
Oriana Power Ltd, a prominent player in solar energy solutions, operates across two primary business verticals: EPC and operations of solar power projects, and Build, Own, Operate, and Transfer (BOOT) solar energy solutions. With a sharp focus on low-carbon energy solutions, Oriana is well-positioned in the burgeoning renewable energy sector.
Business Overview
Incorporated in 2013, Oriana Power Ltd specializes in rooftop and ground-mounted solar installations and off-site solar farms under open access. The company's market capitalization stands at ₹4,601 crore, with a current price of ₹2,264 per share. Notable financial metrics include a Stock P/E of 47.4, a ROCE of 37.5%, and a ROE of 61%.
Financial Performance
Revenue Growth
Sales:
FY2023: ₹135 crore
FY2024: ₹383 crore (183% YoY growth)
TTM: ₹678 crore (184% growth compared to the previous year)
Profitability
Net Profit:
FY2023: ₹11 crore
FY2024: ₹54 crore
TTM: ₹97 crore (414% YoY growth)
Operating Profit Margin (OPM) improved from 14% in FY2023 to 21% in FY2024.
Shareholding Pattern (as of Sep 2024)
Promoters: 61.41%
FIIs: 0.19%
DIIs: 0.00%
Public: 38.40%
Future Projections
Revenue and Profit Growth
The company’s compounded sales and profit growth over three years are 125% and 322%, respectively. With robust sector tailwinds and a clear focus on execution, Oriana Power is likely to sustain high double-digit growth in the foreseeable future.
Capital Expenditure (Capex)
Oriana is heavily investing in capacity expansion and technology. Fixed assets increased from ₹29 crore in FY2023 to ₹135 crore in FY2024. An additional ₹52 crore in CWIP suggests ongoing projects likely to enhance operational capacity.
Debt and Financing
Total borrowings rose from ₹71 crore in FY2023 to ₹184 crore in FY2024. Despite the increased leverage, the strong ROE of 61% and high operating margins underline efficient capital utilization.
Strategic Focus
Expansion in solar EPC and BOOT verticals.
Targeting corporate clients seeking renewable energy compliance.
Strengthening operational efficiencies to sustain high OPM.
Risks and Concerns
High dependency on debt financing could pressure interest coverage.
Competitive intensity in the solar EPC sector.
Regulatory uncertainties related to renewable energy policies.
Investment Thesis
Oriana Power Ltd is at the forefront of India’s energy transition journey, capitalizing on the growing demand for sustainable energy solutions. The company's consistent financial performance, aggressive expansion plans, and sectoral growth make it an attractive investment for long-term value creation.
Valuation
Given the current Stock P/E of 47.4 and significant growth in EPS, Oriana's valuation remains justified for a growth-focused investor. Continued improvement in operational metrics and strategic execution would further support premium valuations.
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Disclaimer
This report is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research and consult with their financial advisor before making any investment decisions.