Renewed Energy

Renewable energy firms keep hitting and dropping out of the limelight every now and then. More than wind energy now, solar is the flavour of the season but promoter KV Bala’s buying spree in Indowind is generating tremendous tailwind for the stock. It may have lost much of its glory since its listing days but Bala has increased his holding by over 10% through Soura Capital.

Over the past two years, Soura Capital’s holding has increased from 7.58% to 17.52%. Indowind listed in September 2007 at Rs.65 and raised Rs.81 crore. Today the market cap is Rs.52.5 crore and the stock trades at Rs.5.85. Powered by this buying, the stock has hit a 52-week high of Rs.6.64. The price in itself may not seem a gale force but the stock is miles off its 52-week low of Rs.3.8.

The Chennai-based firm is a wind farm developer and manages wind assets in Tamil Nadu and Karnataka. It has an installed capacity of 51 MW and the FY17 financial performance was much better than that in FY16. Net sales increased 54% to Rs.29.57 crore from Rs.19.22 crore whereas net profit more than doubled from Rs.0.76 crore to Rs.1.63 crore.  Bala’s optimism might be powered by the improved performance sustaining as well as the book value per share of Rs.19.

With the government’s renewed thrust on renewable sources of energy (not to mention its aim of reaching 60 GW of wind power capacity by 2022), there is expectation that the depreciation driven industry might regain some of its lost glory. To make the most of this bonanza, Indowind is also reportedly looking at raising its installed capacity to 100 MW. According to the management, it will also be in a position to charge higher prices by directly selling power to consumers after its power purchase agreement with the Karnataka government ends in 2018. Not content with the wind in his face, the promoter is also exploring venturing into solar. Talk about making the most of a shining policy.