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Mytrah Energy Ltd: THE INVESTMENT CASE

Mytrah Energy price target suggests this stock could fly

Cantor nudged up its valuation to 130p from 123p in the wake of the refinancing and results from the Indian wind power firm. To put this into context, the shares are trading at 49p currently (up 7% on the day).
Mytrah Energy price target suggests this stock could fly
INVESTMENT OVERVIEW: MYT The Big Picture
One City broker is very bullish on the stock.

Broker Cantor Fitzgerald reckons there is the potential for a 165% rise in the share price of renewable energy firm Mytrah Energy (LON:MYT) based on its updated price target for the stock.

Cantor nudged up its valuation to 130p from 123p in the wake of the refinancing and results from the Indian wind power firm. To put this into context, the shares are trading at 49p currently (up 7% on the day).

Analyst Adam Forsyth, reiterating his ‘buy’ advice, told investors: “A refinancing package reduces the impact of exiting debt and secures funding for the strong development pipeline.

“We see both of these achievements as materially de-risking our investment case. Faster roll out of assets and lower debt costs leads us to upgrade our forecasts.”

On Thursday the group said it has refinanced its existing portfolio of sites through a US$380mln debt package with three banks.

Mytrah said it was the largest refinancing ever seen in the Indian renewables sector and the first to put ten wind power plants under one financial package.

It will mean lower interest costs and a higher credit rating, the company  added.

Mytrah had already flagged that a disappointing wind season had affected trading over the year.

Results today showed a dip in profits to US$0.47mln (US$2.28mln) in 2015, though revenues rose by 7% to US$74.7mln.

“During the period under review, wind speeds have been variable from month to month and somewhat below expectations over the entire period.

“However, the company's current wind farms are geographically spread across 6 states, covering over 2000km from the northern to southern part of India.

“This has, to some extent, mitigated the effects of the low wind this year, as some plants experienced slightly better wind conditions than others.”

Over the year, the company’s capacity rose by 10% to 583 Mw, with 33 wind turbines installed across 3 projects.

Capacity has since risen to 616 Mw with 783 Mw expected to be on line at the start of the 2016 wind season.

That is 40Mw ahead of previous guidance said Ravi Kailas, chief executive.

“When this operational capacity is combined with projects currently under construction, and a successful entry into the solar business, Mytrah now has the ability to reach 1,380 MW (1.40 GW) of renewable electricity production capacity in the next few years,” he added.

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Mytrah Energy Ltd Timeline

Article
August 14 2015

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