Suzlon Energy shares: Nuvama Institutional Equities has recently started covering Suzlon Energy, expressing a favorable view towards the renewable energy company. They perceive Suzlon as the frontrunner in the wind energy sector, holding a dominant position. Aligning with other local brokerages, Nuvama foresees a potential 20% increase in Suzlon Energy’s stock value.
With the energy landscape gradually favoring renewables, especially solar, diversifying the supply mix by bolstering the wind’s share is crucial. Nuvama emphasized that achieving an optimally decarbonized grid at the lowest cost involves a blend of wind, solar, and battery storage capacities. They noted that wind power generation during monsoons and nighttime, when solar output is reduced, is particularly advantageous.
Suzlon has maintained a strong 30% market share in the domestic market, attributed to its technological edge and dependable Operations & Maintenance (O&M) services. The company’s order book has seen remarkable growth, surging from 652MW in FY23 to 3.3GW in May-24, supported by a more lucrative product mix that ensures revenue visibility for the next couple of years.
Nuvama expressed confidence in Suzlon’s ability to uphold its leadership in Wind Turbine Generator (WTG) and turnkey Engineering, Procurement, and Construction (EPC) execution, anticipating Order Book (OB) and Profit After Tax (PAT) Compound Annual Growth Rates (CAGR) of 21% and 61% respectively for the period FY24–27. They initiated coverage on the stock with a target price of Rs 53, based on 35 times the FY27E Earnings Per Share (EPS) for the WTG, foundry, and forgings businesses, indicating a 20% potential upside from its previous close at Rs 43.96
Following a bullish outlook from brokerage firms, Suzlon Energy’s shares saw a rise of over 2.85% to reach Rs 45.20 during Wednesday’s trading session, leading to a total market capitalization exceeding 61,000 crores. In the year 2024 thus far, the stock has surged by approximately 20%.
Among other brokerage houses, Anand Rathi has upheld its ‘buy’ rating on the stock with a target price of Rs 58 per share, indicating a potential upside of 32%. Similarly, JM Financial has also assigned a ‘buy’ rating to the stock, setting a target price of 54 rupees.
Anand Rathi remarked, “With a market share exceeding 32% in India’s wind turbine sector, we anticipate a focus shift towards fulfilling its substantial 3.3GW Order Book (OB), projecting deliveries of 1.5GW and 2.2GW for FY25 and FY26 respectively.” They also highlighted the trajectory of India’s wind capacity installations, expected to reach 8-9GW by FY27, fueled by the government’s persistent push and growing demand from commercial and industrial sectors. -Suzlon Energy shares
JM reiterated their ‘buy’ rating on the stock, citing a robust order book, a promising bid pipeline, and the company’s efforts to fortify its balance sheet and organization. Despite the challenges associated with scaling up annual capacity additions beyond 5GW, JM maintains its target price unchanged.
Also Read: RBI
In a filing with the exchange on Wednesday, Suzlon disclosed a new order acquisition for the development of a 551.25 MW wind power project commissioned by the Aditya Birla Group. Suzlon is set to deploy 175 wind turbine generators (WTGs) featuring Hybrid Lattice Tubular (HLT) towers, each with a rated capacity of 3.15 MW, across locations in the Barmer district of Rajasthan and the Bhuj district of Gujarat.
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