Oriana Power Stock Up By 780% In 1 Year: What’s Driving This Rally?

Oriana Power Stock

You know, when a stock rises by an incredible 780% in just one year, it makes you wonder what’s driving this amazing growth… In this article, we will break down the key reasons behind the Oriana power stock rally and will discuss whether you should invest, sell, or hold this stock.

Oriana Power Stock

Here we go!

(A) What’s driving the Oriana Power Stock Rally?

The following points describe the key reasons behind this-

(A.1) Consistent Order Wins

Guess what? One of the main reasons for Oriana Power’s stock surge is its consistent success in securing new orders. Since its debut, the company has been winning significant contracts for renewable energy projects, particularly in solar power. These orders provide steady revenue and showcase the company’s ability to deliver large-scale projects. For instance-

  • They recently commissioned a 29 MWp solar power plant for a well-known steel manufacturer in Karnataka.
  • In April, Truere 100 Energy, a subsidiary of Oriana Power grabbed a valuable contract to develop a 5 MWp solar power plant under the CPP segment. It will generate a monthly recurring revenue for the next 25 years.
  • Also, it sealed a deal for a 76.62 MW (AC) solar power plant that strengthened its commitment to supply renewable energy. With a total developmental cost of Rs.3.3 billion, this contract showcases its dedication to providing sustainable energy to the nation.

Such achievements boost investor confidence and drive the stock price up.

(A.2) Impressive Financial Performance

Just look at this- Oriana Power’s financial performance has been nothing short of phenomenal. Over the past few years, the company has shown significant revenue and profit growth

Revenues (Rs. in million)337.61,014.601,339.50
Revenue Growth (%)200.532.1
Net Profit (Rs. in million)28.23.369.5126.8
Net Profit Margin (%) 3.35.68
Financials of Oriana Power Stock Rally

From 2021 to 2023, their revenue grew at a compounded annual growth rate (CAGR) of 58.3%, and their net profit grew at an even higher CAGR of 65.1%. In just the second half of the financial year 2024, their revenue surged by 398%, and net profits shot up by an astounding 750%. Such strong financial results make investors more willing to invest in the company, pushing the stock price higher.

(A.3) Government Support and Subsidies

You see, government support plays a big role in the renewable energy sector. Oriana Power has benefited from Central Financial Assistance (subsidies) for its projects. For example, one of their projects received a subsidy of Rs.17.27 crores, which makes the project more viable and cost-effective. 

This kind of support not only improves project profitability but also attracts more investors, contributing to the stock’s upward movement.

(A.4) Strategic Expansion and Diversification

Another factor driving the stock rally is Oriana Power’s strategic expansion and diversification into new areas like Compressed Bio Gas (CBG). The company secured a significant contract to develop a CBG plant in Maharashtra, which will produce 21 tons of biogas daily. This diversification opens up new revenue streams and reduces the company’s reliance on a single source of income, making it a more attractive investment.

(A.5) High Return on Equity (ROE)

Oriana Power High ROE

You know, ROE is a key metric that investors look at to judge how effectively a company is using its equity to generate profit. Oriana Power boasts an impressive ROE of 37%, which is much higher than the industry average of 12%. This high ROE indicates that the company is very efficient at generating profits from its equity, making it a more attractive option for investors.

(A.6) Market Sentiment and Investor Confidence

Lastly, market sentiment and investor confidence have played a crucial role. When a company consistently delivers strong financial results and secures new orders, it creates a positive buzz in the market. This positive sentiment attracts more investors, leading to higher demand for the stock and, consequently, a higher stock price. Oriana Power’s consistent performance has built a strong reputation among investors, fueling its stock rally.

So, you see, Oriana Power’s stock has surged by 780% in a year due to a combination of consistent order wins, impressive financial performance, government support, strategic expansion, high ROE, and strong market sentiment. 

These factors together have created a perfect storm, driving the stock price to new heights. Isn’t it fascinating how these elements come together to influence the stock market?

Now, the question is- What should an investor do with Oriana Power stock? Just go through the next section and you’ll find out!

(B) Buy, Sell, or Hold:  What Should Investors Do with Oriana Power Stock?

Investor's Sentiments

So, you’re probably wondering what to do with Oriana Power stock now that it has skyrocketed. Should you buy, sell, or hold? Let’s break down each option so you can decide what’s best for you-

(B.1) Buy

You see, buying Oriana Power stock might be tempting, especially when you look at its recent performance. Here are a few reasons why you might consider buying-

  • Strong Growth Potential: Oriana Power has shown incredible growth in its financial performance and continues to secure new, lucrative contracts. This indicates that the company might keep growing in the future.
  • Government Support: The renewable energy sector is getting a lot of attention and support from the government. Subsidies and incentives can make projects more profitable, which can be great for the company’s bottom line.
  • Market Trends: The shift towards renewable energy is a global trend. Oriana Power is well-positioned in this space, which means there could be more growth opportunities ahead.

However, you should be cautious because the stock has already risen by 780%, so it might be overvalued. Buying at this high price can be risky if the stock doesn’t continue to grow at the same pace.

(B.2) Sell

Now, you might be thinking about selling the stock. Here’s why that could be a good idea-

  • Locking in Profits: If you already own the stock, selling now could allow you to lock in your gains. With a 780% increase, you’ve made a significant profit, and selling can secure that profit.
  • Risk of Overvaluation: You know, when a stock rises so rapidly, it can sometimes become overvalued. Analysts have mentioned that Oriana Power’s fundamentals don’t fully justify its current high price. Selling now can help you avoid the risk of a potential price drop.
  • Market Volatility: The stock market can be unpredictable. With such a steep rise, there could be sudden corrections. By selling, you avoid the risk of losing your profits if the stock price falls.

(B.3) Hold

So, what if you decide to hold onto the stock? Here are some reasons why holding might make sense-

  • Long-Term Growth: If you believe in Oriana Power’s long-term potential and its ability to keep securing big contracts, holding the stock could be beneficial. The renewable energy sector is likely to keep growing, which can boost the company’s future performance.
  • Dividend Potential: As the company grows, it might start paying dividends. Holding onto the stock could provide you with regular income in the future.
  • Avoiding Short-Term Market Fluctuations: By holding the stock, you don’t have to worry about short-term market volatility. You can ride out the ups and downs and potentially benefit from long-term growth.

(C) What should You do?

Investor's Decision

Now here is the bottom line- it depends on your investment strategy and risk tolerance-

  • If you’re a risk-taker and believe in the company’s long-term potential, you might consider buying more or holding onto your current shares.
  • If you’re risk-averse and want to secure your profits. Selling could be the safer choice.
  • If you’re somewhere in between, you might decide to hold, keeping an eye on the company’s performance and market trends.

You see, investing is all about finding the right balance between risk and reward that fits your personal financial goals. 

Note: We have also explained the reasons behind the exponential price rise of the following stocks-

You can go through these articles for detailed information.

Make sure to do your research and consider consulting with a financial advisor before making any decisions. That’s what I’m talking about – making informed choices!

Related Posts:

Photo of author
Published By: Supti Nandi
Notify of
Inline Feedbacks
View all comments