Shares of a renewable energy company extended gains for the third session in a row after large deals took place on the counter. The company’s shares are locked in a 5% upper circuit at ₹ 25.85 apiece on the National Stock Exchange (NSE). In the past three days, its share price has escalated by 15%.
Reports suggest that over 90 million shares or 1% of the total equity of Suzlon Energy changed hands in a block deal. The value of the transaction was about ₹ 232 crores, but the names of the buyers and sellers could not be ascertained immediately.
Suzlon Energy manufactures wind turbine generators and related components. It has been winning a slew of orders and it recently shared an update about an order that it won back in 2018.
According to an exchange filing, Suzlon and Avikiran Solar India Pvt. Ltd. have decided to downsize a project in Kutch, Gujarat, to 168 MW from 285 MW earlier. The company attributed the downsizing of the order to the impact of the COVID-19 pandemic and the resultant disruption of the global supply chain.
Suzlon had won various orders in May 2018, including the above order from Avikiran Solar, which was won under a Solar Energy Corporation of India (SECI 4) bid.
Last week, Suzon won a 201.6 MW order from O2 Power Pvt. Ltd. for its 3 MW series of wind turbines and this order was touted to be one of the largest orders of its new 3MW series turbine.
The company’s share price has risen by nearly 291% from its 52-week low of ₹ 6.60 a piece in October 2022 to its 52-week high of ₹ 25.85 apiece, thereby delivering multibagger returns. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares in October last year, the value of their holdings would have been ₹ 3.91 lakhs today!
With a market capitalization of ₹ 33,177 crores, Suzlon Energy is a small-cap company. It has an ideal return on equity of 19.36% and a debt-to-equity ratio of 1.76. Its shares were trading at a price-to-earnings ratio (P/E) of 64.89, which is slightly lower than the industry P/E of 66.32, indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
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