PICK OF THE WEEK

Entegra Ltd

BSE Code: 530419

CMP: Rs.29

Book Value: Rs.26.12

Market Cap: Rs.309.89

Introduction: Entegra Ltd is a pioneer in the global arena with an integrated approach to Renewable Energy Development, Solutions, Products and Services. With a portfolio that spans the entire gamut of renewable energy solutions, Entegra Ltd's endeavour is to energies the future with clean, green, sustainable and cost-effective renewable energy solutions. Entegra Ltd in order to create an integrated clean energy portfolio to cater to our ever increasing requirements without endangering nature and restore it for our future generations, is harnessing energy from natural elements - wind, water, sun and earth.

The following are the subsidiary companies of Entegra Ltd:

(i) Maheshwar Hydel Power Corporation Limited (SMHPCL),

(ii) Ennertech Biofuels Limited (EBL) and

(iii) Nevaa Solar Power Company Private Limited (NSPCPL). Nevaa Solar Power Company Private Limited was incorporated as subsidiary company w.e.f. 10.11.2009 to implement the Solar Power Projects in the state of Rajasthan.

Shareholding Pattern: The promoters hold 74.38% while the general public holds 25.62%.

Shareholding belonging to the category "Public" and holding more than 1% of the Total No.of Shares
Sl. No.	Name of the Shareholder	No. of Shares	Shares as % of Total No. of Shares
1	Padmini Mercantile Pvt Ltd	4,221,008	3.95
2	Durvish Mercantile Pvt Ltd	2,061,222	1.93
3	Panther Fincap & Management Services Ltd	1,955,000	1.83
4	Ani-Abhi Investment Private Ltd	1,183,462	1.11
5	Anjani Finvest Pvt Ltd	1,439,462	1.35
6	Vidhi Holdings Pvt Ltd	1,439,462	1.35
	Total	12,299,616	11.51

Industry Outlook: India today has one of the largest programmes in renewable energy but still has far to go, as about 70% of its total energy requirements are still imported. Shortages remain chronic across the country despite concerted efforts to narrow it down for the past 15 years. According to a McKinsey report, India’s demand for power will soar to a whopping 3, 15,000 MW by 2017, requiring an investment of $600 billion if the economy keeps its pace of growth at 8%. The current average power deficit of the country stands at 77,708 MW, with a 13.8 % peak time deficit in February, 2009. (Source: KSEB Officer’s association portal). But what is lamenting is that despite India’s abundant natural resources, renewable energy sources contribute only 7% of the total installed capacity of 1,47,965.51 MW. (Data Source: CEA, As on March 31, 2009).

Trigger:

• Entegra is emerging as a big player in Renewable energy segment. With effect from 01.04.2009, the Company started to focus fully on the Renewable Energy Business.
• In FY10, as per the scheme of merger of SKG Power Ventures Pvt. Ltd. with Entegra Ltd, approved by the Hon’ble High Court of Bombay, Shree Maheshwar Hydel Power Corporation Limited became a Subsidiary Company of the company with 68.73 % equity holding. The Maheshwar Project work is Project is ready for generation of electricity. Sree Maheshwar Hydro is implementing a 400 mw run of the river hydro power project in which Entegra Ltd holds 68.73% stake, as mentioned earlier, which will increase to 85.6%. Entire generation will be sold to MPEB and hence company won’t pay any royalties for usage of water. The project has three-tier build in security mechanism to secure its payments from MPEB. The company has obtained income tax holiday for a period of any 10 years from the block of first 15 years. The Project has potential to earn an incremental ROE of 16.3% (over and above 15.5% base ROE) at 99% utilization and generation of 1370mn units onwards making an effective ROE of 31.8%. Project is expected to generate 50% higher energy levels considering the water flow from the upstream projects-1000mw Indira sagar and 520mw Omkareshwar. The Company has also signed MOU with Gujarat Energy Development Agency for 50 mw CSP project in Kutch region under 25 years PPA with government.
• The EnnerGreen Solutions division has completed 2 Wind Solar Hybrid Projects of 12 KW each at Rajiv Gandhi Proudyogiki Vishwavidyalaya (RGPV) in Bhopal, Madhya Pradesh and 10 KW Off-grid Wind - Solar Hybrid system at VRDE in Ahmednagar, Maharashtra. Further, 4 Energy parks have been established at Ujjain, Sehore, Shahdole & Datia in Madhya Pradesh.
• The 10 MW CSP Project & 1 MW SPV Power projects are being set up in Jodhpur district in the state of Rajasthan. The land for the same has been acquired. Tariff of both the projects has been approved by the CERC with Power Purchase Agreement (PPA) signing expected by end of January, 2011. The financial closure is expected to be achieved by the first quarter of FY12.
• The Company is planning development of a 30 MW CSP project in Rajasthan using the same technology under the JNNSM program. This project, if selected, will follow on the heels of the 10 MW CSP project and will achieve commercial operation in 2013. Under the same JNNSM program, the Company may also propose a 5 MW SPV project in Rajasthan for development and completion in late 2011.
• The Company is looking out for development opportunities for new Hydro Power Projects in the North and North East region. With the experience of hydro power team and assured cash flow from Maheshwar Project, the company is well positioned to take up development of more hydro power projects.

Chart Check and Conclusion: Though there is as no so strong buy signals but then the stock is in the highly oversold territory and hence can be accumulated around the current levels with a SL of Rs.27.90. The targets could be as high as Rs.70, because of the obvious reasons.

Disclaimer: Though due care has been taken while preparing this report but no responsibility will be assumed by the author for the consequences what so ever, resulting out of acting on these recommendations or after reading the report.

The calls made herein are for informational purposes and are not recommendations to any person to buy or sell any securities. The information is derived from sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column for buying and selling of securities. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their actions. The author, his acquaintances, his company or his family members may or may not have positions in the Scrips mentioned in this column. Investors should take their own decisions while buying and selling the shares/securities.

Note: This Research Report was sent to the PAID GROUPS on 16th January, 2011. The scrip should give 100% from the CMP of Rs.26.60 (Today's price).