Ujaas Energy Ltd., the solar-plant builder backed by Bollywood star Amitabh Bachchan, expects annual sales to rise as the industry’s tax incentives and steady cash flows increase investor demand.
Revenue for the fiscal year ending this month will probably top last year’s 2.4 billion rupees ($40 million), which was a sevenfold jump from the prior year, according to the Indore, Madhya Pradesh-based company. Profit surged almost 30-fold.
“That trend will continue,” Joint Managing Director Vikalp Mundra said in an interview this week.
Ujaas hands over ready-made solar projects to customers, overseeing construction, licensing and power-sale contracts to ensure plants have buyers for their electricity. A similar model used by wind-turbine makers such as Suzlon Energy Ltd. drew investment from non-power companies, helping make India the fifth-largest wind market.
Ujaas, formerly a manufacturer of power transformers known as M&B Switchgears Ltd., will complete 100 megawatts of solar projects by the end of this month and expects to double that next fiscal year, Mundra said. The renewable-energy business now accounts for 95 percent of sales.
Customers include basmati-rice exporter KRBL Ltd., which has bought 15 megawatts of capacity, and gearbox maker Deepak Industries Ltd. Such industrial groups invest in solar plants to claim depreciation benefits, which reduce tax liabilities on their other businesses, Mundra said.
The plants have agreements to sell their output at about 4 rupees a kilowatt-hour, and the owners earn an additional 2 rupees a kilowatt-hour by selling renewable-energy credits on India’s power exchanges.
“It makes sense for them,” Mundra said. “They make money.”
Investors in Ujaas include actor Bachchan, who holds a 1.6 percent stake according to the latest filings. Bachchan has a four-decade career in Indian films and also featured in Baz Luhrmann’s “The Great Gatsby” along with Leonardo DiCaprio.