Sarda Energy had two good news to share and that was reflected in the stock price; from its close of Rs.674.74, it went up to Rs.708, just a tad away from its 5% UC of the day at Rs.708.40. It is currently trading at Rs.706 levels.
The first news - Chhattisgarh State Electricity Regulatory Commission approved provisional tariff for the 113 MW Hydropower Project of Madhya Bharat Power Corporation Ltd. (a subsidiary of the Company).
This is considering 85% of the cost of the project incurred as per audited accounts of the company as of 31st March 2021 with return on equity of 15.5% p.a. as per relevant regulations under the Electricity Act.
The final tariff will be determined based on the cost incurred up to the date of COD, as may be approved by the Commission, following the due process of law in due course.
The second news - reaffirmation in credit ratings for bank facilities of the company by Crisil as under:
Total bank facilities rated - Rs 1105 crore
Long term rating - CRISIL A+/Positive (reaffirmed; outlook revised from Stable)
Short term rating - CRISIL A1 (reaffirmed)
The upgrade reflects an improvement in the credit risk profile, backed by significant improvement in financial risk profile.
The ‘Positive’ outlook factors in the expectation of sustenance of the improved operating performance, as both scale and margins are likely to improve structurally once the third 1x36 megavolt ampere (MVA) ferroalloy furnace commissions by fiscal 2023.