Bondada Vs Oriana Engineering

🧠Straight from my SEBI Registered Equity Research Desk

 🌞Comparing 2 EPC power houses which have made investors wealthy in last 1 year alone!

 👉Its Bondada Engineering Vs Oriana Power

 👇Here's a head to head comparison of both

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But before diving deep, let's see what are some key growth drivers for their businesses

Both Bondada Engineering (Solar + Telecom EPC) and Oriana Power (Solar EPC) operate in sectors experiencing significant growth due to various tailwinds

👉Government Policies

🔷The Indian government has been making substantial investments in renewable energy (RE) and infrastructure development

🔷The Union Budget 2024 increased allocation to

🌞Solar Energy Sector: ₹4,970 Cr ➡️ ₹10,000 Cr

📡Telecom Sector: ₹97,579 Cr ➡️ ₹1,18,000 Cr

🔷Policies aimed at decarbonization, and increasing RE capacity to meet targets set under Paris Agreement, COP28, G20, and go carbon neutral by 2075

🔷Programs aimed at improving rural and urban electrification are also contributing to the growth of RE

🔷Add to that, India is naturally gifted with lots of sunlight, providing a big opportunity to generate solar energy

🔷Telecom has become a national priority, and massive incentives are being provided to the sector in the form of PLI grants 

👉Snapshot 

 🏭Bondada Engineering Ltd

✅Mkt Cap ~ ₹6,432 Cr

✅CMP ~ ₹2,978/-

✅P/E ~ 144x

✅Returns Since Listing ~ 1885% (11 months)

 🌞Oriana Power Ltd

✅Mkt Cap ~ ₹4,390 Cr

✅CMP ~ ₹2,288/-

✅P/E ~ 81x

✅1Y Return ~ 622%

👉Business Model

🏗️Bondada Engineering

🔶Incorporated in 2012, Co. specializes in providing engineering, procurement, and construction (EPC) services, as well as operations and maintenance (O&M) services to

🔹Telecom Sector (60% of total revenue)

🔹Solar Energy Sector (40% of total revenue)

🔶Co. delivers passive telecom infrastructure services including

🔹Construction

🔹Erection

🔹Operation

🔹Maintenance of telecom towers

🔹Civil, electrical, and mechanical work 

🔶They also supply poles and towers, lay and maintain optical fibrecables, and provide power equipment and other related services to major telecom companies and tower operators in India

🔶Co. also participates in Solar EPC and Solar O&M work, including solar module mounting, panel installation, and electrical wiring of solar systems 

🌞Oriana Power Ltd

🔷Incorporated in 2013, Oriana operates in the renewable energy sector and undertakes construction and maintenance of solar power projects, including both rooftop and ground-mounted systems 

🔷EPC Services: Oriana Power caters to the complete lifecycle of the project, from design and engineering, to procurement and construction. It has two models 

✅CAPEX Model (84% of revenue): Customers invest in solar power projects, while Oriana handles the Engineering, Procurement, and Construction (EPC), as well as the operations

✅RESCO Model (16% of revenue): Operates as BOOT (Build, Own, Operate, Transfer) Model. Under this model, Oriana develops solar energy projects, operates them, and eventually transfers the ownership to clients. This model allows clients to benefit from solar energy without the initial CAPEX 

👉Noteworthy Points

🏗️Bondada Engineering 

🔶Budget 2024 allocated a massive ₹82,916 crores for BSNL’s technology and infrastructure upgrades. Bondada has won orders from BSNL in the past

🔶The Budget also announced a significant increase in spends for BharatNet - one of the biggest rural telecom projects in the world to provide broadband access for applications like e-health, e-education and e-governance in rural and remote India

🔶Co. has announced a stock split in the ratio of 1:5 which will improve liquidity

🔶Co recently completed its first Independent Power Producer (IPP) project with  capacity of 2.80 MW, having a Power Purchase Agreement (PPA) with BHEL for 25 years

🔶They have Incorporated a wholly-owned subsidiary, Bondada Green Engineering Pvt Ltd, focusing on manufacturing

🔹Solar MMS

🔹Telecom towers

🔹Poles

🔹Transmission towers

🔹Crash barriers, and industrial cable trays

🔶Establishment of Bondada Industrial Park I and II

🔶Established uPVC profile extrusion plant under the brand "TruVu" and an aluminum doors and windows fabrication facility under "Alurise"

🔶Won an order in June 2024 worth ₹939 crore from NLC India. Also recently won a small order from Bharti Airtel

🔶Order book as of March 31, 2024, stood at ₹1,747 Cr with an additional ₹1,260 Cr in the pipeline

🌞Oriana Power Ltd

🔷Oriana is currently executing additional 250+ MWp of solar projects

🔷The company has ventured into emerging fields such as

🔸Compressed Biogas (CBG)

🔸Battery Energy Storage Systems (BESS)

🔸Green Hydrogen/Electrolyzer Technology

🔷Received order worth ₹155 crores in July 2024 for 40 MWp solar plant in Rajasthan to be built in 9 months. Maintenance period is 25 years with annual charges

🔷Recently received order for setting up 16+ MWp Agro-Photovoltaic Power Plant in Delhi

🔷Solarizing the first bullet train terminal at Sabarmati (700 KWp)

🔷Co. has done strategic tie-ups for exploring solar EPC opportunities in Middle East and Africa

🔷Has also set up technical partnerships for BESS and Green Hydrogen Electrolyzers (point expanded upon later)

👉Competitive Advantages

🏗️Bondada Engineering

🔶Co’s. promoters have close ties to Dr. Faruk G. Patel, promoter of KP Group (which has 3 famous listed entities KPI Green, KP Energy, and KP Green Engineering)  

🔶Bondada expected to receive substantial orders from KPI Green

🔶They have issued 3.1 lakh warrants on a private placement basis to Dr.Faruk G. Patel. After conversion he will own 1.43% stake in Bondada

🔶With the backing of a renewable energy giant like the KP Group, Bondada can scale up its solar EPC vertical very rapidly 

🔶Fastest growing SME without sacrificing margins 

🔶Govt. prioritising telecom sector, making it a matter of national security 

 🌞Oriana Power Ltd

 🔷 Oriana Power has just partnered with a US-based Co. Splitwatersto revolutionize the Green Hydrogen market in India. They are developing a technology to make Electrolysers very cheap. This will reduce the cost of producing Green Hydrogen by 30%

🔷The demand for Electrolysers are expected to grow at a CAGR of 80% till 2028 - the fastest among all components in the Energy sector  

🔷The company has excellent HR policies. It strategically assigns its workforce to regions where they feel most comfortable (eg. South Indians in Southern states etc) so they can service clients effectively 

🔷Established local vendor supply chain for crucial components which makes procurement and delivery efficient 

🔷Because they started out as an engineering Co, they can undertake projects that need to be built within a specific amount of space eg. on rooftops etc (which requires engineering knowledge and expertise)

 👉Results

🏭 Bondada Engineering Ltd

 ✅H1 FY24 Results (YoY)

👉Revenue: ₹296 Cr ➡️ ₹505 Cr (Up 70.60%)

👉Operating Margins: 7% ➡️ 10%

👉Profit: ₹15 Cr ➡️ ₹31 Cr (Up 106.6%)

✅FY24 Full Year Results

 👉Revenue: ₹371 Cr ➡️ ₹801 Cr (Up 116%)

👉Operating Margins: 8% ➡️ 9%

👉Profit: ₹17 Cr ➡️ ₹46 Cr (Up 170.58%)

🌞Oriana Power Ltd

 ✅H1 FY24 Results (YoY)

 👉Revenue: ₹64 Cr ➡️ ₹319 Cr (Up 398.43%)

👉Operating Margins: 18% ➡️ 22%

👉Profit: ₹6 Cr ➡️ ₹49 Cr (Up 716.66%)

__

✅FY24 Full Year Results

 👉Revenue: ₹136 Cr ➡️ ₹383 Cr (Up 181.62%)

👉Operating Margins: 15% ➡️ 21%

👉Profit: ₹11 Cr ➡️ ₹54 Cr (Up 390.91%)

 👉Verdict

 ✅Although both Co’s. provide an excellent opportunity for multibaggerreturns in the future, the winner is Oriana Power 

✅It’s focus on futuristic technologies like BESS, Biogas, and Green Hydrogen gives it an edge 

✅Further, the game changing partnership with Splitwaters promises to be revolutionary (PFD of announcement is attached) 

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