Is This LIC-Backed Power Stock The Next Suzlon Energy Of Stock Market? Rallies By 151% In 6 Months

Leading independent power producer, Orient Green Power has made some remarkable gains this year. The stock has hit back-to-back upper circuits and new 52-week highs for three consecutive trading sessions, and it emerged as a multi-bagger by rising nearly 151% in six months. With such a strong upside, India's largest life insurer LIC India wins big since it's among the largest public shareholders of the stock. Does that mean, Orient Green is the next Suzlon Energy which has entered the best-performing stocks list year-to-date?

Orient Power froze at a new 52-week high of Rs 20.06 apiece on BSE, which is also its 5% upper circuit on Wednesday. This stock has continued to hit 5% upper circuits and record highs since during the Muhurat trading which was held on the evening of November 12.

The reason why Orient Green Power is seen as the next successful stock like Suzlon Energy is because it too has travelled a journey from rags-to-riches this year. Orient Power's share price was merely Rs 8 per share six months ago, on May 16, 2023. Six months later, the stock has impressively rallied by nearly 151% as of now.

Six months ago, Suzlon was just Rs 8.22 apiece, and today it has given nearly 393% return on BSE, by trading at Rs 40.49 apiece. Suzlon too touched a new 52-week high of Rs 40.57 apiece on BSE on Wednesday.

LIC holds 1,54,59,306 equity shares or 1.58% in Orient Green Power as of September 30, 2023, making it the largest public institutional investor in the company.

Orient Green operates in the rapidly growing renewable energy sector, which benefits from increasing demand for electricity and regulatory support. It also recorded robust growth in the September 2023 quarter, where consolidated PAT jumped by 121.9% YoY and 707.31% QoQ to Rs 75 crore. Revenue also climbed to Rs 122.30 crore in Q2FY24 versus Rs 107.82 crore in Q2FY23 and Rs 78.68 crore in Q1FY24.

Suzlon shares saw huge momentum after it raised up to Rs 2,000 crore through qualified institutional placements (QIPs). Orient Green Power also has something stored for future fundraising.

Earlier this month, Orient Green received board of directors approval for fundraising through the issuance of equity shares having a face value of Rs 10 each to the company's eligible equity shareholders on a rights basis.

Orient Green's rights issue is valued at up to Rs 225 crore.

During the Q2 results announcement, T Shivaraman, Managing Director & CEO of Orient Green revealed that the improved credit rating and refinancing enabled them to cut the interest cost by 25%. In addition, their efforts to monetise the non-core assets and use these funds to fuel our growth contributed over Rs 15 crore to profit and Rs 19 crore to its cash flows during the quarter. During the year, it also created a Debt Service Reserve Account (DSRA) of Rs 42 crore which strengthens our liquidity position further.

Going forward, Shivaraman added, "in order to achieve our targeted installed capacity of 1GW, our Board approved a capacity expansion plan wherein our company shall be venturing into solar and a hybrid model of wind and solar energy. The Board of Directors approved raising funds not exceeding Rs 225 crore through a rights issue for the initial capacity expansion, subject to regulatory approvals. The reduced finance cost and a conducive regulatory environment promoting green energy bode well for the future."

The technical analysis of Orient Green looks broadly steady to bullish. As per Trendlyne data, the stock's Momentum Score is 75.4 which is technically strong. Also, its MACD (12, 26, 9) and MACD Signal is at 1.4 and 0.8 which is a bullish indicator. Orient Green Power Company is trading above 8 out of 8 SMAs. Overall, it is trading above 7 out of 9 Oscillators in the bullish zone.

However, its RSI and MFI are at 85.2 and 100 which is considered strongly overbought. This implies that the stock may show a pullback.

How Orient Green's share price performs going ahead will be keenly watched. More announcements on the rights issue and fundraising are likely to influence the stock price ahead.

Orient Green is among the largest Independent Power Producers of Renewable Power in India.As of June 2022, we have a portfolio of 402.3 MW of wind assets spread across the states of Tamil Nadu, Andra Pradesh, Gujarat, Karnataka. This also includes a 10.5 MW wind farm in Croatia, Europe.