A series of unfortunate events in the Tamil Nadu area of India will cap output at the Chennai-based power projects of OPG Power Ventures (OPG:AIM).

This implies a £5m to £6m shortfall in revenue for the year to 31 March 2017 and is acting as a deadweight on the share price, which has fallen more than 8% to 57p.

But Shares remains convinced that these are no more than short-term setbacks and that the medium to longer-term investment case stacks up as attractively.

The trouble started in November when the Indian government pulled 500 rupee and 1,000 rupee bank notes out of circulation in a counterfeiting crack down. That created cash shortages across the nation and has stymied consumer spending.

Economic activity was further curtailed in early December following the death of Jayalalithaa Jayaram, the chief minister of India’s southern Tamil Nadu state, sparking widespread mourning in the region.

These problems were compounded just days later as Cyclone Vardah lashed Tamil Nadu, killing several people and halting normal activity and hitting power supplies and demand.

Cantor Fitzgerald analyst has pulled forecasts temporarily until the impact of these issues, and recent coal pricing declines, can be worked through. But he does conclude that these events are largely one-offs and ‘should not detract significantly from the investment case.’

Revenue of roughly £215m had been anticipated this year, according to Reuters data.

We continue to support the growth and income investment case, this looks a good buying opportunity.

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