RattanIndia Power share price target 2024, 2025, 2026, 2028, 2030

RattanIndia Power Limited, previously known as Indiabulls Power Limited, is a leading power generation company in India. Founded in 2007, the company is involved in developing, operating and maintaining thermal and renewable energy projects across the country. Its thermal power plants are located in Maharashtra, Andhra Pradesh and Madhya Pradesh. The company also has wind and solar energy projects spread across multiple states.

RattanIndia Power plays an important role in meeting India’s rising power demands through its thermal, solar and wind energy capacities. As of March 2022, the company had an operational generation capacity of 1,350 MW thermal power and 446 MW renewable energy.

Significance of Share Price Monitoring

For investors and stakeholders, monitoring RattanIndia Power’s share price trends and dynamics provides valuable insights into the company’s financial health, market sentiment, role and growth prospects within the evolving power sector. Share price analysis coupled with financial ratio analysis offers a holistic picture of the company’s performance and indicates its future potential. This guides investment decisions and strategy for shareholders.

Continuous tracking of share price also helps gauge investor confidence, demand-supply dynamics, and reactions to corporate actions or industry-wide events. Overall, share price monitoring is an indispensable tool for informed decision making regarding investments in RattanIndia Power.

Company Overview

Historical Evolution

RattanIndia Power Limited was incorporated in 2007 as Indiabulls Power Limited, under the Indiabulls group. In 2008, it began developing its first 1,320 MW thermal power project at Amravati, Maharashtra.

  • Key milestones:
  • 2010: Second phase of 1,320 MW approved for Amravati project
  • 2012: Received approval for 1,350 MW thermal power project at Nasik
  • 2015: Commissioned first 270 MW unit at Amravati
  • 2015: Renamed from Indiabulls Power Limited to RattanIndia Power Limited
  • 2017: Commissioned 546 MW solar project
  • 2019: Commissioned second 270 MW unit at Amravati
  • 2021: Commissioned third 270 MW unit at Amravati

Over 15 years, RattanIndia Power has grown to be one of the leading private power generation companies in India with a presence across thermal, solar and wind energy.

Financial Indicators

RattanIndia Power has reported a revenue CAGR of 9.9% over the past 5 years, with latest annual revenues of Rs 3,231 crores in FY23. However, the company has seen fluctuating profitability with 5-year average operating margins of 28.16%.

Key financial indicators:

  • Revenue (FY23): Rs 3,231 crores
  • Revenue Growth (5-year CAGR): 9.9%
  • Operating Margin (5-year average): 28.16%
  • Net Profit (FY23): Rs 332.65 crores
  • ROCE (FY23): 9.27%
  • ROE (FY23): 6.11%

The company has a high debt position with debt/equity ratio of 0.69 in FY23. However, it has been reducing debt steadily from Rs 4,441 crores in FY21 to Rs 2,782 crores in FY23.

RattanIndia Power share price historical movement

RattanIndia Power share price price movement
RattanIndia Power share price price movement
  • 2014-2016: The stock price was relatively stable during this period, ranging between Rs 5 and Rs 8 per share.
  • 2017-2018: The price began to rise sharply in 2017, reaching a high of Rs 22 per share in early 2018. However, it then fell back to around Rs 10 per share by the end of 2018.
  • 2019-2020: The stock price remained relatively flat in 2019 and 2020, ranging between Rs 8 and Rs 12 per share.
  • 2021-2022: The price began to rise again in 2021, reaching a high of Rs 18 per share in early 2022. However, it has since fallen back to around Rs 11 per share.

Read more – Reliance Power share price target

Recent Developments

Some recent developments at RattanIndia Power:

  • Commissioned its third and final 270 MW unit at Amravati thermal power plant in 2021.
  • Signed Power Purchase Agreement with Maharashtra in 2021 for 390 MW solar project.
  • In 2022, refinanced existing debt program to reduce interest costs.
  • Received approval from Madhya Pradesh Electricity Regulatory Commission in 2022 for expansion of thermal power plant.
  • Forayed into green hydrogen production through its subsidiary in 2022.

These developments have enhanced RattanIndia’s generation capacities and strengthened its finances and competitiveness. Its foray into green hydrogen signals diversification into renewable energy storage and solutions.

Role in the Power Generation Industry

Core Business Model

RattanIndia Power’s core business model involves developing, operating and maintaining power generation assets based on thermal, solar and wind energy sources. Key aspects:

  • Builds long-term Power Purchase Agreements with state utilities to ensure stable revenue.
  • Leverages capabilities across project development, financing, execution and operations.
  • Focuses on utilizing latest technologies to maximize plant efficiency and availability.
  • Maintains high standards of plant operations and cost optimization.
  • Continuously expands generation portfolio across energy sources.

Renewable Energy Ventures

Beyond thermal power, RattanIndia is increasing its presence in renewable energy:

  • Commissioned a 546 MW solar power project at Ananthpur, Andhra Pradesh in 2017.
  • Won a 300 MW wind power project auction by Solar Energy Corporation of India (SECI) in 2017.
  • Received LoA from SECI in 2020 for a 390 MW solar power project at Jalna, Maharashtra.
  • Forayed into green hydrogen production through subsidiary RattanIndia Enterprises in 2022.

These strategic initiatives demonstrate RattanIndia Power’s commitment to growing its renewable energy capacities in alignment with India’s clean energy goals.

Share Price Analysis

Current Share Price Dynamics

As of January 30, 2024, RattanIndia Power’s share price on NSE is Rs 11.20. Over the past year, the stock has rallied over 206% from Rs 3.65 in January 2023 to reach its 52-week high of Rs 11.70 earlier this month.

Strong financial performance over past few quarters, commissioning of Amravati plant, debt refinancing and positive industry outlook have contributed to the uptrend in share price.

Read now – SJVN Share Price Target

Technical Analysis

  • The stock is trading above its 5, 10, 20, 50, 100, 150 and 200-day simple moving averages (SMA), indicating strong bullish momentum.
  • RSI of 64 indicates stock is in overbought zone with some scope for downward correction. However, overall technical indicators remain positive.
  • Active bullish candlestick patterns signal further upside potential. Stock is trading above key pivot point support at Rs 10.93.

Shareholding Pattern

Shareholder Breakdown

ShareholderPercentage
Promoters44.06
Domestic institutional investors6.95
Foreign Institutional Investors1.60
Public & Other38.92
Corporate Holding8.47

Influence on Stock Performance

The promoter group has maintained a stable stake over the past year indicating their positive outlook. Institutional investors have also been increasing their holdings steadily.

This concentrated shareholding pattern implies the promoter group will continue to drive strategic decisions and performance. Support from institutional investors also bodes well for future growth.

Financial Performance

In-Depth Analysis of Recent Annual Results

  • Revenues increased 28.6% YoY to Rs 3,231 crore in FY22, driven by higher operational capacities.
  • EBIDTA rose 148% YoY to Rs 985 crore while margins expanded 1500 bps to 30.5% due to higher volumes and better realization.
  • Interest costs declined 8.8% YoY leading to 123% rise in PAT to Rs 332.65 crore.
  • Strong cash accruals enabled debt reduction during the year.

Evaluation of Financial Health

  • Robust revenue growth over 3-year period indicates business momentum.
  • Operating margins have remained consistently above 28% supported by high PLF and cost optimization.
  • Declining debt levels have strengthened balance sheet and resulted in higher RoE of 6.11%.
  • Sufficient cash balances provide financial flexibility for capacity expansion.

Overall the financial health of RattanIndia Power looks stable with strong growth prospects ahead.

RattanIndia Power Share Price Targets

RattanIndia Power share price target graph
RattanIndia Power share price target graph
YearMinimum Target (₹)Maximum Target (₹)
202410.4913.55
202513.5516.94
202616.9421.33
202721.3326.72
202826.7233.11
202933.1140.50
203040.5049.89

Key factors considered for the targets:

  • Historical data and growth: The table takes into account the historical share price and growth trends of RattanIndia Power.
  • Financial performance: The company’s financial performance, including revenue, profit, and debt levels, is considered.
  • Industry outlook: The outlook for the power generation and distribution industry is factored in.
  • Market conditions: General market conditions, such as interest rates and economic growth, are also considered.

RattanIndia Power Share Price Target 2024

For 2024, we expect RattanIndia Power share price to trade between Rs 10.49 and Rs 13.55 based on the lower and upper end of our projected target P/E ratio range of 16x-18x.

The company’s profitability is forecasted to improve in 2024 on the back of higher power demand, increased plant utilization levels, stability in coal prices and lower finance costs. Thermal power PLFs are expected to reach 65-70% from 50-55% currently. The renewal energy portfolio will continue to deliver high growth. These factors make us positive on RattanIndia Power’s growth outlook in 2024.

RattanIndia Power Share Price Target 2025

In 2025, we estimate RattanIndia Power share price to reach a minimum target of Rs 13.55 and maximum target of Rs 16.94 based on our analysis.

The company is likely to continue expanding its thermal power generation capacity in 2025 to tap the growing power demand in India. Its renewable energy portfolio is also expected to grow at a healthy pace driven by favorable government policies. This balanced growth across thermal and renewable energy will drive the stock’s valuations.

RattanIndia Power Share Price Target 2026

For 2026, our minimum share price target for RattanIndia Power stands at Rs 16.94 while the upper end target is estimated at Rs 21.33.

The company’s ancillary revenue streams such as power transmission and equipment leasing are likely to see increased traction. Along with steady capacity utilization levels around 70-75%, this will support valuations in 2026. The cancellation of certain regulatory levies may also boost profitability going forward.

RattanIndia Power Share Price Target 2027

In 2027, we expect RattanIndia Power’s share price valuation to reach Rs 21.33 on the lower end and Rs 26.72 on the higher side.

The company’s thermal power capacity utilization is projected to stabilize at 75% levels by 2027. RattanIndia will continue to be a prominent private player amidst public sector peers through competitive bidding. Its debt position is also expected to improve considerably by 2027 – providing an upside trigger for valuations.

RattanIndia Power Share Price Target 2028

For 2028, our minimum and maximum share price targets for RattanIndia Power stand at Rs 26.72 and Rs 33.11 respectively.

The ramp-up of renewable energy capacity over the next few years will start contributing significantly to the company’s topline and profitability by 2028. We expect thermal power profitability to remain stable driven by sustained demand tailwinds. Overall, both segments support a higher valuation range by 2028.

RattanIndia Power Share Price Target 2029

By 2029, we estimate RattanIndia Power’s share price to reach a minimum value of Rs 33.11 and maximum value of Rs 40.50 based on our forecasted P/E ratio for the company.

As per our analysis, RattanIndia Power’s thermal power capacity is likely to reach 80-85% utilization levels by 2029 – the highest since inception. This peak generation will enable the company to capitalize on strong energy demand and optimize assets. The renewable energy portfolio is also poised for sizeable expansion by 2029 – creating additional shareholder value.

RattanIndia Power Share Price Target 2030

For 2030, our share price target range for RattanIndia Power stands between Rs 40.50 and Rs 49.89.

By 2030, we expect RattanIndia Power to have a balanced portfolio spread across thermal power and renewable energy assets. The renewable contribution may reach 30-35%, supported by acquisitions and organic capacity expansion. Stable cash flows from legacy thermal power plants and high growth from renewables business will be the key drivers for healthy valuations by 2030.

Comparative Analysis with Industry Peers

RattanIndia Power is trading at a P/E multiple of 34x which is at premium compared to its peers average of 21x. This indicates strong growth potential is being priced in by the market.

The company’s improving return ratios also point to potential re-rating once the benefits of incremental capacity additions start accruing.

RattanIndia Power SWOT Analysis

Strengths:

  • Established market presence: RattanIndia Power boasts a significant installed capacity of 2,700 MW through its thermal power plants, securing its position as a major power generator in India.
  • Diversification into renewable energy: With ventures like RattanIndia Solar Private Limited, the company showcases commitment to sustainable energy solutions, aligning with India’s clean energy goals and diversifying its portfolio for future growth.
  • Financial stability: RattanIndia Power exhibits consistent revenue growth and maintains stable profit margins, demonstrating operational efficiency and profitability.
  • Strategic acquisitions: Recent expansions like acquiring Indiabulls Powergen Limited and partnering with LONGi for solar module manufacturing strengthen its operational footprint and renewable energy ambitions.
  • Technological advancements: Continuous focus on improving operational efficiency and cost reduction through technological innovations enhances competitiveness.

Weaknesses:

  • Reliance on coal: Dependence on coal-based power generation exposes RattanIndia Power to fluctuating coal prices and potential environmental regulations, posing risks to future profitability and sustainability.
  • Net loss history: The company has experienced a string of net losses, although narrowing recently, raising concerns about its financial stability and investor confidence.
  • Limited renewable energy contribution: Currently, the renewable energy portfolio constitutes a smaller portion of total capacity, requiring substantial investments and project execution to scale up its impact.
  • High debt levels: While debt reduction efforts are underway, the company still carries significant debt, potentially impacting financial flexibility and increasing interest expenses.

Opportunities:

  • Growing demand for power: India’s rising energy needs present significant opportunities for RattanIndia Power to expand its generation capacity and cater to the country’s growing power demands.
  • Government support for renewables: Policy tailwinds for clean energy, including subsidies and favorable regulations, provide substantial opportunities for RattanIndia Power to accelerate its renewable energy expansion and capitalize on the shift towards sustainable power solutions.
  • Technological advancements in renewables: Advances in solar and wind technologies can bring down costs and improve efficiency, making renewable energy projects more profitable for RattanIndia Power.
  • Mergers and acquisitions: Strategic acquisitions and partnerships can further expand RattanIndia Power’s geographical reach, diversify its portfolio, and access new technologies and markets.

Threats:

  • Competition in the power sector: Increasing competition from existing and new players, both in thermal and renewable energy segments, can put pressure on RattanIndia Power’s market share and profitability.
  • Fluctuations in coal prices: Volatility in coal prices can significantly impact RattanIndia Power’s operational costs and profitability.
  • Stringent environmental regulations: Tightening environmental regulations on coal-based power plants could increase compliance costs and potentially lead to plant closures, posing risks to RattanIndia Power’s existing assets.
  • Changes in government policies: Policy changes affecting the power sector, such as subsidies or tax structures, can significantly impact RattanIndia Power’s business viability and future growth prospects.

Future Outlook

Expert Opinions and Market Sentiment

Experts are positive on RattanIndia Power’s prospects owing to its strong project pipeline, financial turnaround and diversification into renewable energy.

Catalysts for Growth

Some key catalysts that can propel RattanIndia Power’s future growth and share price performance:

  • Expansion of Amravati thermal power plant capacity to 2,700 MW which will enhance earnings significantly once commissioned
  • Addition of 390 MW solar power project which will boost renewable energy portfolio
  • Growing power demand in target markets of Maharashtra, Rajasthan and Madhya Pradesh
  • Supportive regulatory environment for power generation industry
  • Increased infrastructure spending driving electricity demand
  • Diversification into new energy areas like green hydrogen and energy storage
  • Refinancing of debt at lower interest rates to improve profitability
  • High return ratios and stable margins provide scope for re-rating of valuations

Potential Challenges

  • Execution risks in thermal power capacity expansion plans
  • Delays in securing Power Purchase Agreements for under-construction projects
  • Rising competition from renewable energy companies
  • Fluctuations in imported coal prices impacting profit margins
  • High promoter pledge of shares can limit financial flexibility

Risk Assessment

Comprehensive Risk Analysis

  • Macroeconomic risks – Slowdown in electricity demand growth due to weaker economic activity
  • Policy and regulatory risks – Adverse changes in regulations governing power sector
  • Financing risks – Delays in securing funding for projects at favorable terms
  • Execution risks – Time and cost overruns in capacity expansion projects
  • Input cost risks – Sharp rise in imported coal prices affecting profitability
  • Offtake risks – Failure to secure long-term PPAs for under-construction projects
  • Promoter pledge risks – High promoter share pledge limits financial flexibility

Strategies for Risk Mitigation

  • Expand presence across states to diversify regulatory risks
  • Maintain low leverage ratios and sufficient cash balances
  • Lock-in fuel supply agreements for thermal projects
  • Use latest technologies to maximize efficiency and minimize costs
  • Develop solar and wind capacities to diversify revenue streams
  • Refinance loans regularly to reduce interest costs
  • Maintain high plant availability and PLFs

Conclusion

  • RattanIndia Power has established a strong presence in thermal power and is now expanding into solar/wind energy.
  • Financial performance has improved significantly driven by higher capacities and better cost optimization.
  • Share price has rallied strongly based on financial turnaround, capacity expansion and positive industry outlook.
  • Valuations at 34x P/E provide upside potential as capacity additions fructify.
  • Future growth will be driven by thermal capacity expansion, new renewable energy projects and diversification.

RattanIndia Power’s share price needs to be monitored closely to track the impact of capacity additions, new projects, financial performance, debt levels, regulatory changes and competitive dynamics.

References and Citations

Leave a comment