Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Azure Power Global Limited Jumped Today

By Scott Levine – Aug 31, 2021 at 3:19PM

Key Points

  • The company's pipeline of projects remains robust.
  • Management sees strong revenue growth in the coming year.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The market was charged up with this renewable energy company's recent quarterly performance.

What happened

Up until today, the dog days of summer had taken a pretty sizable bite out of shares of Azure Power (AZRE 7.58%), an independent renewable power utility located in India, with the stock plummeting more than 25% from the start of August through yesterday. As of 2:06 p.m. EDT, however, shares are bounding back today, rising 17.1%.

Powering the surge in the stock's rise today, Azure Power reported first-quarter 2022 results yesterday after the market closed. In addition to surpassing analysts' consensus revenue estimate of $56.6 million and reporting sales of $59.7 million, the company crushed earnings estimates, posting adjusted earnings per share of $0.19, a notable beat of analysts' expectation of $0.03.

Aerial view of a utility scale solar facility.

Image source: Getty Images.

So what

It's not only the company's success in beating analysts' sales and earnings expectations that's behind the stock's rise today; investors are also pleased with the company's growth prospects. Azure Power reported that the operating capacity of its portfolio at the end of Q1 2022 was 2,052 megawatts, a 23% year-over-year increase, and it seems poised to continue growing in the months to come. Azure Power said that it has 4,000 megawatts of projects that have been contracted or awarded though the actual power purchase agreements haven't been signed yet.

Investors also seem to be charged up about the company's guidance. In fiscal 2022, Azure Power forecasts revenue of 17.9 billion rupees to 18.9 billion rupees (about $241 million to $254 million). Should the company achieve the midpoint of this guidance, it will represent a 21% increase over the approximate 15.2 billion rupees that the company reported on the top line in 2021.

Now what

Although Azure Power's growth in its pipeline of renewable power assets is in development, investors should recognize that there's no assurance that these contracted and awarded deals will come to fruition. Consequently, they'll want to monitor whether the company succeeds in inking the power purchase agreements. Similarly, developing these utility-scale projects is complicated, and the recent rise in COVID-19 cases sweeping through the country may mean that the development of the projects may take longer than previously expected. Nonetheless, Azure Power is certainly a stock to watch as India aspires to reduce its carbon footprint and adopt more clean energy solutions.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Azure Power Global Limited Stock Quote
Azure Power Global Limited
AZRE
$6.10 (7.58%) $0.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
360%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.