The shares of this leading green energy firm hit a 5% upper circuit on Monday after Morgan Stanley initiated a buy call on the stock with an upside potential of 17%.
Suzlon Energy Ltd shares reached the upper circuit of Rs 49.99 apiece on the National Stock Exchange, up 5 percent, with a market capitalization of Rs 68,005.70 crores.
The company is a renewable energy solutions provider and is in the business of manufacturing, project execution, and operation and maintenance of wind turbine generators, and the sale of related components.
Suzlon Energy Ltd., an end-to-end wind power solutions supplier in India, manufactures wind turbine generators, power generation equipment, and related equipment., Suzlon is a market leader with 111+ wind farms and an installed capacity of over 14,490 MW.
Over the past two decades, Suzlon has installed over ~20.5 GW of wind energy in 17 countries across six continents.
Over the past three years, it has reduced its debt from Rs 12,000 crore in FY20 to nil in FY24 through various debt-to-equity conversions. The company has recently become net cash positive with a cash reserve of Rs 11bn as of Mar’24, after an equity raises worth Rs 2,000 crore in Q2FY24 for debt reduction.
Suzlon Energy Ltd., the wind turbine generator manufacturer, has increased its market share to 27% in the financial year 2024 from 22% in financial year 2023.
Suzlon Energy Ltd shares have gained 25% over the last six months and 338% over the last 12 months.
Suzlon’s client base includes prominent companies such as ACC, Adani Renewables, Aditya Birla Group, Bajaj, GAIL, Hero, ITC, ONGC, Reliance, SBI, Tata, TVS, and Vedanta.
Suzlon recently secured its first order for the fiscal year 2025, totaling 402 MW, from Juniper Green Energy.The company’s revenue increased by 9.5% year-over-year, from Rs 5,971 crore in FY 21-22 to Rs 6,529 crore in FY 22-23. However, its net profit declined by 77%, from Rs 2,887 crore to Rs 660 crore.
Morgan Stanley gave a Buy call on the stock with a target price of ₹58 .5 from the current price of ₹50 representing a 17 percent increase. As per the CNBC TV 18 news report,.
Morgan Stanley stated that Suzlon 2.0 stands to gain significantly from India’s energy transition. The company has undergone a robust restructuring, becoming financially stronger through debt reduction and operationally leaner by cutting fixed costs.
Suzlon achieved debt-free status by raising capital through methods such as a Qualified Institutional Placement (QIP) and a rights issue, resulting in a net cash balance of ₹1,100 crore by the end of the March quarter.
The brokerage forecasts that Suzlon is expected to receive wind orders totaling 32 GW, equivalent to approximately $31 billion, in the upcoming five years. Morgan Stanley predicts Suzlon’s earnings will experience a compounded annual growth rate (CAGR) of 57% between financial years 2024 and 2027.
The brokerage expects suzlons wind orders worth 32 GW or nearly $31 billion in the next five years.
Suzlon’s earnings are likely to grow at a compounded annual growth rate (CAGR) of 57% over the next three years between financial year 2024 to 2027, according to the Morgan Stanley note.
Written by Omkar Chitnis
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