I have been pointing out for a while that we have a low forward p/e. My broker's website gives a forecast p/e for year ending 31/3/17 of 8.8 but I am sure that will not be taking into account the latest figures. Revenue for the whole year ended 31st March 2016 was only £128 m so I doubt you are far wrong.
1) The coal price has gone up, though I would be amazed if there is not provision for this in the med/long term supply contracts, there may be a hit to earnings in the second half. 2) The revenue growth will be coming mostly from Gujarat which is less profitable than the operations in Tamil Nadu. 3) The interest payments will be spiking now that Gujarat is operational.
But any half decent analyst will know this.
There is a bit of a cloud over the Indian power space at the moment (or so I read in the FT) whereby politicians are using power subsidies to 'buy' votes and it is causing difficulties upstream. How this will affect OPG with their customer base is unknowable. Also, the exchange rate has changed quite a bit since then and this will benefit the earnings but increase the debt of OPG in sterling and that might be making people nervous.
I have a chunk of these and hope you are right about it being cheap.
Can someone check I'm not misunderstanding the following comment from the trading update RNS. It says: "In the six months ended 30th September 2016, according to its unaudited results for the period, the Company generated revenues of £118 million, EBITDA of £41 million, profit before tax of £18 million and earnings per share of 4.80 pence." Assuming the second half is not dis-similar (although I note it may be a little lower due to a couple of thing) and so let's say EPS is 9 pence - that means that the PE ratio, as it stands, is about 55/9 = 6.1. That seems ridiculously low. Am I missing something???
If I had put a stop loss on this it would have been triggered long ago. To be honest I have stopped using them because I always regretted it when they were triggered. I am well down on this share but have great confidence that the tide will turn eventually.
It's impossible to deny that this has been on a downward trend for a considerable period. It has approximately halved in value in less than two years. However, it has done that against a background of the successful commissioning of much more capacity and rapidly increasing revenue and profits, as well as the declaration of a maiden dividend. That doesn't make sense in the fundamentals but does make sense in the context of a large shareholder off loading shares over an extended period to realise cash. The recently retired former Chairnan is my prime suspect but whoever it is has clearly been off loading chunks in round numbers for ages. Whoever it is clearly doesn't want to crash the price and is off loading in a controlled way, but in the absence of more volume it is having a depressing influence on the sp.
However, he has to stop eventually, and then watch this rise. Watch out for the q3 update.
I am holding but wish I was buying in now, rather than some time ago!
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