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.
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.
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.