Moneycontrol Bureau
Brokerage house Nomura has rated wind turbine firm Suzlon Energy as a ‘buy’, terming it a potential turnaround story in the emerging wind power sector in India. The brokerage has a price target of Rs 38 per share for the stock.
"From a position of strength, Suzlon has gone through multiple crises over the past five years including debt default. However, it has since taken corrective steps to substantially repair its balance sheet by selling off its German offshore wind arm, Senvion for 1 billion euros and issuing fresh equity worth Rs 1800 crore to Dilip Shanghvi & Associates—a promoter for Sun Pharma," says the Nomura note.
The brokerage feels Suzlon can now focus all its energies on new order wins and execution in the domestic market, and is well placed to win back 50 percent market share.
"Re-introduction of wind power incentives and supportive policy aimed atmeeting the government’s ambitious wind energy target of 60GW by 2022should help to drive demand for wind equipment, in our view. Strong operating/financial leverage from under-utilised manufacturing facilities and debt reduction is likely to drive normalisation of margins and strong earnings growth for Suzlon in the years ahead, as per our estimates," the Nomura note says.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
