Shares of Suzlon Energy extended gains on September 11, rising 5 percent to hit the upper circuit. The stock is gaining traction after Morgan Stanley reaffirmed its ‘overweight’ rating, following the company's win of India’s largest wind energy order from NTPC Green Energy Ltd, a subsidiary of NTPC Ltd.
The stock has attracted significant buying interest after the company raised funds and cleared nearly Rs 1,500 crore in debt during FY 2023-24, turning net worth positive for the first time in a decade. Prominent investors like Blackrock joined as shareholders.
Suzlon Energy stock has surged ninefold between April 2023 and September 2024. In just 18 months, the company's market cap has gone from Rs 10,000 crore to over Rs 1 lakh crore. During this period, Suzlon’s order book has jumped 8 times, including the recent order from NTPC Green Energy.
ICICI Securities recently raised its target price for Suzlon Energy to Rs 80, up from Rs 70, while maintaining an 'Add' rating due to the recent surge in the stock's value. The firm values Suzlon at 50 times its projected FY26 earnings of Rs 1.60 per share.
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The brokerage highlighted that Suzlon plans to use the capital raised to boost execution capacity and secure additional orders, aligning with its strategy of selling non-core assets, as outlined in April 2022.
JM Financial also recently stated that Suzlon Energy's sale of its iconic corporate office, Suzlon One Earth, at a fair value, would boost the company’s financial strength and operational efficiency. With Suzlon paying annual rent equivalent to 12 percent of the sale consideration against an FY24 ROE of 28 percent, the brokerage sees the asset-light strategy as value-accretive.
It noted that this move aligns with Suzlon’s growing working capital needs for increased project execution, making the sale of its large office space both strategic and beneficial for the company’s rising order book and project demands.
At 9:33 am, Suzlon Energy shares were locked at 5 percent circuit to trade at Rs 81.95 on the National Stock Exchange (NSE). The stock has gained around 112 percent so far this year, outperforming Nifty's returns of around 14 percent.
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In the past 12 months, Suzlon Energy stock has skyrocketed 241 percent, more than tripling investors’ capital, while Nifty climbed 28 percent during the same period.
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