OPG is an independent power producer based in the Indian state of Tamil Nadu, with 112MW of capacity, which is set to increase to 742MW by FY15. The group captive model enables OPG to sell to industrial (minority) shareholders or state customers and is able to use either domestic or imported coal.
Investment summary
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.
