Oriana Power Limited — Credit Ratings, 08-02-2025: Credit Rating- Revision

Oriana Power Limited's credit rating was upgraded by CRISIL to 'Crisil BBB+/Stable' for long-term facilities and 'Crisil A2' for short-term facilities, reflecting a significant enhancement in the company's creditworthiness. This upgrade underscores the company's improving business risk profile, driven by a substantial compounded annual growth rate (CAGR) of 124% in revenue over the past three fiscal years, with projections indicating revenue could reach around ₹1000 crore in fiscal 2025. Robust order inflows, including solar projects worth ₹1758 crore and an additional ₹1200 crore in the pipeline, should further bolster revenue growth.

Operating profitability improved to 20.4% in fiscal 2024 and is projected to sustain at over 19-20% in the medium term, supported by efficient cost management strategies in its solar EPC services. While operating income showed remarkable growth—from ₹377 crore in fiscal 2024 to an estimated ₹354 crore for H1 FY25—the company’s net profit reached ₹52 crore, maintaining a healthy PAT margin of 14.71%.

Financially, Oriana Power's balance sheet remains sturdy, with an estimated net worth between ₹430-440 crore and low gearing below one time as of FY25. Future capital infusion of ₹206.85 crore through a preferential allotment is also set to enhance net worth and liquidity, coupled with a comfortable interest coverage ratio.

Overall, investor sentiment remains favorable as Oriana Power continues to leverage its extensive experience and strong operational capabilities. A buy insight appears warranted, given the strategic growth trajectory and robust order backlog, tempered by the inherent risks tied to tender-based operations and supply chain dependencies.