Synopsis:
UBS initiates ‘buy’ ratings on four power stocks, Suzlon, BHEL, Waaree, and Premier Energies, citing sector upcycle and strong earnings outlook, with up to 43 percent upside potential.
The Indian power sector offers a significant investment opportunity valued at Rs. 40 lakh crore over the next decade, fueled by increasing demand, infrastructure modernisation, and the shift towards clean energy, as per a report by Motilal Oswal.
To meet a projected power demand of 458 GW by 2032, India has launched an extensive Rs. 9.15 lakh crore initiative to strengthen its energy infrastructure. UBS, a Switzerland-based brokerage firm, has initiated coverage on four power Original Equipment Manufacturers (OEMs), recommending a “buy” rating with potential upside of up to 43 percent.
Here are the four power stocks in which global brokerage firm UBS has initiated coverage on Tuesday, 5th August, with a “buy” recommendation:
Suzlon Energy Limited
With a market cap of Rs. 89,336 crores, the stock moved up by around 2 percent on BSE, rising to Rs. 66.12 on Tuesday. Suzlon Energy Limited, India’s no.1 wind solutions provider, is primarily engaged in the business of manufacturing Wind Turbine Generators (WTGs) and the sale of related components of various capacities.
Global brokerage firm UBS has initiated coverage on Suzlon Energy with a ‘buy’ rating and a target price of Rs. 78 per share, representing a potential upside of nearly 20 percent from its current price of Rs. 65.2.
Suzlon Energy’s revenue is projected to grow at a CAGR of 41 percent between FY25 and FY28, while its EBITDA is expected to expand at a CAGR of 46 percent. Both of them are supported by an increase in annual deliveries from 1.5 GW to 4.2 GW.
Premier Energies Limited
With a market cap of Rs. 45,560 crores, the stock moved up by around 1.5 percent on BSE, rising to Rs. 1,034.75 on Tuesday. Premier Energies Limited is another key player in India’s solar manufacturing sector.
UBS has initiated coverage on Premier Energies with a ‘buy’ rating and a target price of Rs. 1,340 per share, representing a potential upside of nearly 33 percent from its current price of Rs. 1,010.7.
The brokerage noted that Premier Energies is leading the industry in terms of integrated expansion. Its 10 GW backwards-integrated capacity is expected to drive revenue growth of 34 percent and EBITDA growth of 36 percent between FY25 and FY28.
Bharat Heavy Electricals Limited
With a market cap of Rs. 85,659 crores, the stock moved up by around 3 percent on BSE, rising to Rs. 248.35 on Tuesday. BHEL, an integrated power plant equipment manufacturer, is engaged in the design, engineering, manufacture, construction, testing, commissioning, and servicing of a wide range of products and services for sectors including power, transmission, industry, transportation, renewable energy, water, oil & gas, and defence & aerospace.
Global brokerage firm UBS has initiated coverage on BHEL with a ‘buy’ rating and a target price of Rs. 340 per share, representing a potential upside of nearly 38 percent from its current price of Rs. 245.85. The brokerage stated that growing order inflows in the thermal power segment could potentially boost the company’s net profit eightfold by FY28.
Waaree Energies Limited
With a market cap of Rs. 88,089.6 crores, the stock moved up by around 1.5 percent on BSE, rising to Rs. 3,136.35 on Tuesday. Waaree Energies Limited is India’s largest solar module manufacturer and leading renewable energy company. The company offers a wide range of solar solutions, including panel manufacturing, EPC services, project development, and rooftop solar systems.
UBS has initiated coverage on Waaree Energies with a ‘buy’ rating and a target price of Rs. 4,400 per share, representing a potential upside of nearly 43 percent from its current price of Rs. 3,066.3.
According to the brokerage, Waaree is entering a phase of capacity-driven earnings growth, with EBITDA margins expected to improve by 640 basis points between FY25 and FY28.
Thermax Limited – Additional Stock
With a market cap of Rs. 41,854 crores, the stock moved up by around 2 percent on BSE, rising to Rs. 3,599.25 on Tuesday. Thermax Limited, a leading energy and environment solutions provider, is engaged in the manufacture, installation, sale, and services related to industrial products, industrial infra, and chemicals.
UBS has also initiated coverage on Thermax with a ‘buy’ rating and a target price of Rs. 5,100 per share, representing a potential upside of nearly 45 percent from its current price of Rs. 3,512.55. The brokerage noted that a power sector upcycle is on the horizon, and established leaders in their respective segments are best positioned to benefit from it.
Written by Shivani Singh
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