Forwarded
Not a investment recommendation
RELIANCE POWER: Fundamentals
*5x Possible*
Denofwealth reiterates that Penny stock real meaning is a company which is dabba co/no business and/or indulges in bogus billing to deceive investors. On the hand, a company having running and sound business quoting in single digit is NOT necessarily a penny stock. Investors should not paint all single digit stocks with Penny brush. A flourishing co might have fallen in trouble due to wrong deeds of Promoter/industry conditions etc and one can study chances of Revival in fortunes of such co.
RPOWER has one of biggest power project portfolio in Pvt sector of India. However Rpower fell in bad times due to excessive ambition to emerge as the biggest power producer in Pvt sector and pledging of Promoter stake.
Rational look at its financials/Fundamentals:
Rpower appears a good buy with Multibagger potential. Although Rpower account is standard, not NPA, and co continues to report NP at net level, stock had vertical fall due to SELLING OF PROMOTER PLEDGE SHARES AND FAILURE OF OTHER ADAG GROUP COMPANIES
RPOWER folio includes Coal based , gas based Hydel and Solar/wind energy projects. *Rpower has 5945 MW of OPERATIONAL power portfolio*
1) 5760 MW coal based : availability 87%
3960 UMPP is largest single location power project in the world. *Q3 PLF 99% is highest in entire India* and handles highest tonnage of coal from its coal mines
2) 185 MW of Solar and renewable energy: PLF 98%, again highest in India
In fact, Rpower may be highest operating margin power co in India. High debt for expansion has proved its undoing. *But Rpower is definitely a good buy at CMP*
2018 2019 9m2020
Ebidta/Cr 4664 4262 3125
Such High Ebidta and mktcap only 600 Cr
Rpower was implementing 2400 MW gas based power project in Samalkot. However due to non availability of gas, project is incomplete since years
Promoter holding is 19%
HDFC Bank 6.97%
We feel worst is behind and no more selling of Promoter shares
*Total 9.95 cr shares delivery in last 9 trading sessions. Is Rpower takeover candidate*
RPOWER QUOTING AT *0.04XBOOK VALUE*
Subject to mkt conditions, Rpower can be in Double Digits (5x) in few months
Risk to Reward ratio most favorable