Good wind season buoys Indowind Energy’s financials

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CHENNAI, SEPTEMBER 21:

A good wind season has buoyed the revenues and profits of Indowind Energy Ltd, a wind power generator with 50 MW of operating capacity.

The Chennai-based company, listed on the NSE, has reported higher revenues and pre-tax profit for the first five-and-half months of the current year than in the whole of 2015-16, shareholders were told at the AGM recently.

The company produced and sold 37 million units of electricity, compared with 34.7 million in the whole of last year. (Wind season typically ends in September.) The higher generation has translated into revenue of ₹20 crore and pre-tax profit of ₹80 lakh, compared with ₹15 crore and ₹18 lakh respectively for the full year 2015-16. (The company’s net profit for last year was ₹72.62 lakh, due to deferred tax credit of ₹54 lakh.)

Indowind has 31 MW in Tamil Nadu and 19 MW in Karnataka. While the generation from windmills in Tamil Nadu is all sold directly to industrial consumers (under the ‘group captive’ route), for an average net price of ₹5.10, the generation from Karnataka is sold to the State’s electricity distribution company at ₹3.40.

Indowind’s Chairman Bala V Kutti told BusinessLine the company has requested the Karnataka discom to release it from the power purchase agreement so that it can sell power directly to consumers for a higher price. Indowind is hopeful of a favourable response, but in any case, the agreement allows the company to opt out of the PPA in 2018, he said.

Bala said the company is also looking to add 10 MW of capacity, which could happen through the ‘re-powering route’, or plucking out the old machines and replacing them with new machines of higher capacity. Indowind’s machines in Tamil Nadu are in Muppandal, which is one of the windiest locations in the country. Many of the machines there are of 225 kW capacity, he said.

Further capacity expansion — “at least 100 MW” — will happen through special purpose vehicles into which other investors will be brought in, he said.The company’s annual report shows a net worth of ₹173 crore, translating into a book value of ₹19.27 a share.

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