Last checked at 11 Mar 2021 11:41
Edison Investment Research Limited Edison Investment Research Limited: OPG Power Ventures (OPG.L): Initiation - Full power ahead 11-March-2021 / 11:41 GMT/BST
London, UK, 11 March 2021
OPG Power Ventures (OPG.L): Initiation - Full power ahead OPG has proved financially resilient through the COVID-19 driven economic slowdown, remaining healthily profitable and cash generative. As the Indian economy recovers (the OECD is forecasting 12.6% growth in 2021) demand for power will return. This should drive the recovery in sales and profits, in turn deleveraging the balance sheet, permitting a return to cash dividends and funding a strategy to develop renewables activities. Using the rating of listed Indian peers suggests a target price of 42p a share. The range is 62p using EV/MW of capacity to 21p on a P/E basis. The differences mainly reflect downtime required to install new environmental equipment and timing differences on tax. These should reverse from 2023 permitting profits to return to growth. Management has indicated a cash dividend in 2021. Consensus does not yet have a pay-out for 2022 although forecast results would suggest further cash generation and deleveraging which would support further cash dividends. Click here to view the full report or here to sign up to receive research as it is published.
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