Indowind, Orient Green shares soar on hopes of better results

The share price of Indowind Energy, a Chennai-based wind power company, has jumped in the last one week. For a long time, the share price had been quoting at around ₹6 on the NSE, and on Monday, it closed at ₹6.3. Galloping steadily over the week, it closed at ₹9.1 on Friday — a rise of 44 per cent in four days.

Also, the number of trades — 308 on Monday, 275 on Tuesday and 439 on Thursday — were higher than any time in the last three months. In fact, only on June 19, had the share seen a higher number of trades — 1,137. The company has 85 MW of wind power capacity, including with its subsidiary, in Tamil Nadu and Karnataka. In Tamil Nadu, it sells power directly to customers under the ‘group captive’ scheme, where it gets ₹5.10 a kWhr, and in Karnataka the electricity is sold to the State-owned electricity distribution company for ₹3.40 a kWhr.

The company was in the news in August when it won an arbitration case against the wind turbine manufacturer Suzlon — the arbitrator had asked Suzlon to pay Indowind ₹20 crore.

While the company did not wish to comment on the rise in share prices, industry observers note that electricity generation from wind farms in TN has been better this year, with the grid being available for offtake of the electricity.

Peak wind season in India is between April and September. Indowind is yet to announce its financial results for the second quarter, but experts note that the results are likely to be good due to better sale of power. As was pointed out by BusinessLine on September 21, 2016, Indowind has a networth of ₹174 crore and the book value per share works out to ₹19.

Another Chennai-based wind power company, Orient Green Power, also saw a marked increase in its share price on Friday. It closed at ₹10.7, up 15 per cent over the previous close, crossing the ₹10-mark for the first time after April 27.

Orient Green Power is due to announce its second quarter results on November 9.

In the first quarter, the company made a consolidated net profit of ₹9.09 crore after a net loss of ₹86 crore in the previous quarter ending March 31. The company also underwent restructuring, divesting its loss-making biomass assets to the parent holding company (of the Shriram Group). In the process, the company rid itself of about ₹200 crore of outstanding debt. The biomass power business had been a drag on the company’s performance.