http://www.cercind.gov.in/2017/orders/02_SM.pdf
One good point observed from the report (page 14) is the sharp rise in redemption of rec which has gone up from 1-2 % to 6-8% . Report also mentions that discoms are buying rec during last few months.
Now with reduced and more pactical rec rates and increased pick up in rdemption by rec, all outstanding rec are likely to be redeemed within a year. This will remove one of the most annoying overhang from the stocks like ujaas.
Question is what brought it here may not take it there. No large order recently. It will achieve 80 MW capacity in FY 17 but what a out FY18. Due to small time of project execution (4-6 month order book is never visible. No way to know how they are doing in rooftop etc?
@sharmasks
The comforting factors were a) they getting grade A ( best rating ) in the
solar industry and b) getting a A- long term credit rating just after their
infamous promoter selling. Also, these two things happened when everyone
was doubting Ujaas numbers and their integrity and capability. One another
comforting factor for me is their confidence to participate in all the
investor conference run by leading brokerage houses where big research
analysts participate. We only see the presentations made in such
conferences. But i am sure the analysts would have grilled Ujaas management
during the conferences. Their continuous participation gives me the
confidence they have nothing to hide and want to be transparent. It is just
a common sensical observation from me. Even in the one or two concalls
back, Anurag was confident Ujaas may do 150 MW in Fy18…Let us hope for the
best…All the things which will support their growth is falling in place.
Lower solar panel prices, lower project costs,.Solar power costs achieving
grid parity, higher IRR for customers,govts policy push etc…It is now
only the question of Ujaas grabbing this opportunity and executing
well…Will they, I wish they did…
Disc: Invested…about 7 - 8% of my portfolio…
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Hi @sagararya,
Can you estimate what would be the impact of write off due to lower floor price and no “vintage multiplier allowed”. I guess it would be quite big.
Disc- Not invested but watching this space with interest
Hi,
Can somebody explain to me about how REC are generated?
Let me be more specific.
Ujaas has its own 15.5 MW solar plan which create some qty of REC. The qty. or inventory presently Ujaas have is more than this. Does that means Ujaas while taking order from customer, also makes agreement to own REC created by plant of customer ( Since Ujaas after completion of plant handover every thing to customer)
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I am attaching herewith TOI article of Swaminathan Aiyar mentioning his views. One threat which he mentions is to project in pipeline of Thermal Power worth 65 GW and relation of Plant load factor of Thermal plant.Solar article 1 16-Apr-2017 15-36-44(1).pdf (1.0 MB)
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After reading an economist’s macro viewpoint, an investor would look at micro level - How better equipped is Ujaas Energy to store solar energy, reduce cost of power generation & distribute more effectively?
Ujaas is an EPC project developer. It has nothing to do with storing solar
energy, reduce cost of power generation & distribute more effectively?.
After the project erection, its job is over. If customer wants, it can
maintain the modules - again nothing to do whatever is mentioned.
What’s the relevance of the Swaminomics article to Ujaas energy?
SunPower isn’t the only company taking note — Tesla is also eyeing India and could enter the market as early as this summer, CEO Elon Musk tweeted earlier in February.
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http://www.bseindia.com/corporates/anndet_new.aspx?newsid=6e344bef-78cf-48b0-b9ff-b38e2cf881d1
Got 2500 kw repeat(extension order) from Rajasthan. Orders are slow and far between. Can they repeat the 80 MW performance expected in FY 17 in FY 18?
Ujaas energy gets a contract for 1768Kwp rooftop solar contract from West Bengal…
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/0f935220-0fbb-4e07-93ad-5c99db3240df.pdf
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For an EPC contractor, getting new orders is just replacing old orders that are delivered and this is business as usual. As and when old orders are delivered, new orders are needed to keep the business going. There is nothing exciting about getting new orders unless the new order(s) is significantly larger than existing orders.
what’s more important is total order book and order inflow in a quarter or year. If order inflow is growing that will really excite shareholders. i.e. if the company receives more new orders this quarters than last order and this continues for several quarters that will be exciting.
Solar panel installation is a one-hit wonder type business. Its not an annuity business like most other businesses.
moreover, for Ujaas, their business model is to install these solar panels on the cheap (and may be even lose money doing that) while generating RECs as annuity business. But REC prices are going down and current trades are happening at lower circuit so you know that fair market value of these REC is lower than the lower circuit.
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This is bound to impact the market and in my opinion will make the economics of recent Badhla bids unviable, The industry was expecting 5% GST. Now the effective price of modules will be higher. For example, for December procurement the module prices will now be 30 cents vs 26 cents earlier. Rupee appreciation can come to the rescue for the IPP players.
Increasing competition is evident from the results of this quarter with a significant decline in margins. There is another issue for EPC players now. Most of the bids are coming for solar parks where many do EPC in house since land procurement is not an issue. The Government has raised its target for solar parks to 40 GW from 20 GW earlier. This reduces the scope for state bids to 20 GW out of which most of the capacity has been executed already. This leaves Ujaas with two markets - distribution generation and rooftop. Both of them are smaller projects and the achieving scale is easier said than done and smaller projects means even higher competition. The company has no choice but to now build its own portfolio of IPP assets.
lowest GST rate of 5 is a welcome step, but does it mean any reduction from current rate?
What is the current taxation on Ujaas?
There was a discussion involving Vikalp Mundra before 6 months.
IIRC, he said that a tax rate upto 10% would be offset (going by historic price trend) within 1 year by a corresponding reduction in panel prices. At 5% tax, that would take 6 months.