There is more upside to come from OPG Power Ventures PLC (LON:OPG) after the India-focused energy group invested £45mln in solar projects, a broker reckons.
OPG said last week that it was investing the cash in four solar power schemes at various sites in the highly industrialised area of Karnataka.
It expects all the projects, able to generate 62 megawatts of electricity in total, to generate cash flow by June next year.
Cantor Fitzgerald reiterated its 'buy' recommendation on the stock and 130p price target.
The broker said the investment would provide useful marginal cash generation from 2017/18.
"Solar pricing looks to have firmed and we expect more in this vein from OPG, with the potential to do up to 300 megawatts in the next three years," Cantor said.
"We have adjusted our forecasts to reflect this initial investment but also taken a more conservative view on coal tariffs and prices to leave our target price unchanged at 130p.
"With an enhanced dividend outlook, we reiterate our 'buy' recommendation."