Analysts have responded positively to yesterday’s news from India-focused clean energy group Greenko (LON: GKO) that it had secured concessions for 650 megawatts (MW) of new wind farms in the country, taking total wind assets in development to more than one gigawatt.
After Matrix Corporate Capital said yesterday that the announcement shows strong forward momentum in the firm’s operations, both Ambrian and Westhouse Securities have chipped in with their views.
Greenko’s new wind farms will be in the Indian states of Andhra Pradesh, Karnataka and Rajasthan and the group already has licences in place to develop wind power projects at its sites in these states.
Ambrian, which has reiterated its buy recommendation, said that it believed Greenko had a more de-risked proposition that other independent power producers for three reasons.
Firstly, Ambrian said the fact that Greenko has achieved planning consent for its assets is an important milestone. Secondly, the firm has a strong balance sheet, with the £50 million equity fundraising, which was also announced yesterday, deemed to be enough to fund the equity portion of 206MW of new wind energy assets after the company had already reached financial closure for around 300MW.
Thirdly, Ambrian expects Greenko’s wind assets to be at the top end of the average wind performance in India, with management estimating PLFs (plant load factors) to be between 27 and 29 percent.
Westhouse rates the shares as ‘accumulate’ and set a target price of 265 pence – a premium of 13.7 per cent to Greenko’s closing price on Thursday. Its view is that Greenko is now well funded to increase its installed base by 316 percent, from 182MW currently to 758MW by 2016.
The broker said that Greenko remains its top pick in the Indian renewable space. “We note the company’s strong track record of project execution and acquisitions in renewable, and its diversified asset base,” said Westhouse, referring to Greenko’s small hydro, biomass and gas assets.