Orient Green

Orient Green Power reported a strong Q2 FY26 with total income of ₹135.45 crores, a 10% year-on-year increase. Net profit for the quarter grew 22% year-on-year to ₹80.94 crores. For the first half of FY26, total income rose almost 20% to ₹228.62 crores, and net profit surged 38% year-on-year to ₹109.56 crores, marking the highest half-yearly net profit in recent past. This performance was attributed to better wind generation, improved machine availability, and a significant reduction in finance costs.

The strong half-year performance was primarily driven by good generation during the wind season, with Q1 being better than the previous year and Q2 aligning with the prior year. The company completed capital maintenance on many wind assets, ensuring full fleet operation during the season. This led to a Q2 FY26 PLF of approximately 28% for the Beta asset, compared to 24.5% in the same quarter last year. Historically, Q2 is the strongest wind period, contributing about 70% of annual generation, with Q3 and Q4 contributing 25-30%.

The company achieved a significant reduction in finance costs, declining over 20% due to improved credit ratings and timely debt repayments. A ₹16 crore refund from lenders for excess interest charged in earlier periods further boosted profitability and cash flow. Current debt levels stand at ₹525 crores. While interest rates are expected to continue declining (e.g., IREDA loan reduced from 9.4% to 9.15%), absolute interest costs may rise next year due to new borrowings for planned expansions. The company anticipates a surplus of ₹25-30 crores this year, which will be invested in new capacity after servicing all debts.

Orient Green Power is pursuing both organic and inorganic growth to reach a target capacity of 1000 megawatts. Organically, the company plans repowering existing assets and adding new assets around its current portfolio. Policy clarity from Tamil Nadu is expected soon, enabling the start of repowering projects. Currently, 25 megawatts of solar assets are under construction, with a 7-megawatt project expected by December 2025 and the remaining 18 megawatts by June 2026. The company currently operates 382 megawatts of wind assets.

The company's Gujarat assets are primarily on PPAs with the electricity board, shielding them from policy changes. In Tamil Nadu, policy changes are being monitored but appear to be prospective, affecting new assets rather than existing ones. The company remains wind-focused for its C&I generation, as solar power prices can drop significantly during afternoon hours due to oversupply. Solar with battery solutions are seen as the long-term model, but currently require government subsidies to be viable, though battery costs are expected to become competitive within a year.

Management acknowledged a recent shift in focus towards investor engagement, having previously prioritized internal performance improvements. They aim to increase interaction with larger financial institutions, believing they now have a robust story to present. The company expects Q3 and Q4 FY26 generation to be similar to last year, with lower interest costs contributing to better margins. Receivables are generally less than 30 days, with Andhra Pradesh being an exception at 45 days for 50 MW of assets.