Gensol Engineering stock hits 5% upper circuit after company secures ₹1340 crore battery energy storage project

Shares of Gensol Engineering, the flagship company within the Gensol group, were locked in a 5% upper circuit limit in today's early morning trade, touching ₹1068 apiece after the company emerged as a successful bidder for the 250 MW/500 MWh standalone Battery Energy Storage Systems (BESS) project worth ₹1340 from Gujarat Urja Vikas Nigam Limited (GUVNL). 

The company highlighted that this project would supply electricity on an “on-demand” basis to Gujarat State's DISCOMs during peak and off-peak hours, thereby extending renewable energy availability beyond solar hours, fulfilling Energy Storage Purchase Obligations, and enhancing grid resilience. 

Also Read: Gensol Engineering top pick among renewable energy stocks on attractive valuations

According to the company, the project will deliver 250 MW/500 MWh of energy for two charge/discharge cycles per day. There is a greenshoe option of awarding a second tranche of 250 MW/500 MWh at the discretion of GUVNL under the same terms and conditions; in the event of the exercise of the greenshoe option, the project could reach 500 MW/1000 MWh, potentially generating a total revenue of approximately ₹2680 crore over the 12-year Battery Energy Storage Purchase Agreement (BESPA) tenure. 

Being one of the first major projects of standalone BESS in the country, the potential for BESS is set to experience substantial growth, fueled by robust policy backing from the government. Securing the project is a testimony to Gensol’s EPC capabilities and efforts towards integration into the value chain, particularly in Advanced Chemistry Cell-based Energy Storage Systems, the company said in its regulatory filing. 

Also Read: Suzlon has wind in its sails despite ‘corporate governance’ hiccups

Anmol Singh Jaggi, Managing Director, Gensol Engineering Limited, said, “It’s a proud moment for Gensol. This landmark for the GUVNL BESS project not only highlights Gensol's expertise and reliability in the renewable energy sector but also sets a clear direction for our future endeavors. It aligns with Gensol's commitment to supporting India's energy transition goals through innovative and sustainable solutions. 

"The BESS market in India is poised for exponential growth, and Gensol is at the forefront, ready to lead this transformation. Securing this project enables us to make a significant impact on the Indian energy market while solidifying our position as a leading industry player in the renewable energy landscape, propelling the future of BESS in India," Anmol Singh added.

Also Read: Torrent Power records 240% surge in 17 months, zooms 525% in 5 years

Gensol Engineering is one of India's premier solar engineering, procurement, and construction businesses. Gensol, which specialises in solar park and rooftop installations, has completed projects totalling more than 770 MW. The firm is also India's largest solar O&M provider.

According to a recent report from brokerage Arihant Capital, Gensol Engineering appears to be in a stronger position among its listed peers. The brokerage pointed out that the stock is trading at a discount to its listed peers due to its unique business strategy and the bright future of India's solar sector. 

Also Read: Modi 3.0: What the PM may focus on for India's transformation into Viksit Bharat

It said that Gensol has outperformed its competitors on nearly all critical metrics. It is the cheapest stock available with solar EPC in terms of both P/E and P/B. It has a solid EBITDA/income ratio of 26.2%, which is higher than most peers, the brokerage underscored. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.