From mint · Dhanya Nagasundaram · · 1m 20s
Powerica Shares Jump 48% Above IPO Price
Nuvama bets on 20% more returns for Powerica shares with Buy call.
In brief
Nuvama bets on 20% more returns for Powerica shares with Buy call. Powerica shares rose 48% above IPO price after Nuvama initiated coverage with a Buy rating and ₹700 target. Originally reported by mint.
Powerica Shares Jump 48% Above IPO Price
Powerica shares rose 48% from IPO price of ₹395 to ₹584.85 on Friday.
“Powerica Ltd shares have gained nearly 48% from their initial public offering (IPO) price of ₹ 395, closing at ₹ 584.85 on Friday.”
Nuvama Initiates Buy Rating
Nuvama started coverage with a Buy rating and ₹700 target, implying 20% upside from Friday's close.
“Nuvama initiated coverage of Powerica with a Buy rating and a ₹ 700 target, implying about 20% upside from Friday’s close.”
Three Growth Drivers
Nuvama expects growth from data centres, wind capacity expansion, and emission control devices.
“Nuvama's bullish view rests on three growth drivers: a recovery in the company's diesel generator (DG) business, expansion of its wind independent power producer (IPP) portfolio and the long-term opportunity in retrofit emission control devices (RECDs).”
Data Centres Drive DG Growth
Powerica's data centre order book is ₹1,100 crore vs FY26 sales of ₹340 crore.
“Nuvama highlighted Powerica's data centre order book of around ₹ 1,100 crore, compared with FY26 data centre sales of approximately ₹ 340 crore”
Wind Capacity Expansion
Powerica's wind capacity expected to grow from 330 MW to 631 MW by FY29.
“Powerica's wind capacity is expected to increase from approximately 330 MW to 631 MW by FY29”
RECDs Offer Long-Term Growth
RECD addressable market at ₹60,000 crore with only five to six certified competitors.
“Nuv: Nuvama estimates the addressable market at around ₹ 60,000 crore, with only five to six certified competitors.”
Earnings Growth Projections
Nuvama projects 21% CAGR in DG PAT, 44% in wind EBITDA, and 27% in RECD PAT over FY26, FY29.
“The brokerage projects a compound annual growth rate (CAGR) of around 21% in DG business profit after tax (PAT), 44% in wind IPP earnings before interest, taxes, depreciation and amortisation (EBITDA), and 27% in RECD PAT over FY26, FY29.”
Key Risks Identified
Risks include passing on costs, capital expenditure recovery, project execution, and RECD mandates.
“Key risks include the ability to pass on price increases, a sustained recovery in private-sector capital expenditure, timely commissioning of wind capacity, expansion of RECD mandates and securing wind projects at profitable tariffs.”
Valuation and Outlook
Nuvama sees attractive valuations with FY29 EBITDA multiple of 6.8x and PAT multiple of 21x.
“Nuvama considers valuations attractive, citing FY29 estimated enterprise value-to-EBITDA of around 6.8 times for the wind business and a price-to-earnings multiple of around 21 times for DG sets.”
The headline
Powerica shares rose 48% above IPO price after Nuvama initiated coverage with a Buy rating and ₹700 target.
