Suzlon Energy shares rise 2% as Investec initiates coverage with 'buy'

Suzlon Energy stock is trading 36 percent lower to its 52-week high of Rs 86.04.

Shares of Suzlon Energy traded higher by 2 percent to Rs 56.15 in morning deals on February 21, extending gains for a third session in a row after brokerage firm Investec initiated coverage with a 'buy' call suggesting positive levers for growth.

The domestic brokerage has assigned a price target of Rs 70, implying an upside potential of 27.5 percent from the last close of Rs 54.88 on the National Stock Exchange. Suzon Energy stock has corrected 12 percent since the start of the year.

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Investec analysts suggest that the company is in a strong position to benefit from the revival in the wind energy sector. The firm has transformed into a net-cash entity with robust return ratios and a growing order book of 5.5 GW. A well-optimized supply chain and a strong pipeline of bids further bolster its outlook.

Investec forecasts Suzlon’s revenue and PAT to grow at a CAGR of 55 percent and 66 percent, respectively, over FY24-FY27, with RoE expected to rise to 32 percent by FY27 from 28.5 percent in FY24.

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In Q3, Suzlon Energy reported a consolidated net profit of Rs 387 crore. This marks an impressive increase of around 91 percent from the Rs 203 crore net profit reported in the same quarter of the previous financial year. The company's revenue from operations also saw a strong rise. It reported a revenue of Rs 2,969 crore in Q3, up over 91 percent from the Rs 1,553 crore revenue reported in the year-ago period.

JP Chalasani, Chief Executive Officer of Suzlon Group, said, "We are experiencing consistent quarter‐on‐quarter growth, with each of our businesses operating as strong, independent entities driving performance. Our manufacturing capacity expansion in India is progressing as planned to fulfill our record‐high order book of 5.5 GW. With our ramp‐up strategy on track and operational preparedness at optimal levels, we can sustain momentum, create long‐term value for our stakeholders, and play a pivotal role in advancing India’s renewable energy ambitions."

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At about 9:20 am, shares of the company were trading at Rs 55.99, higher by 1.9 percent from the last close on the NSE. Suzlon Energy stock is trading 36 percent lower to its 52-week high of Rs 86.04.

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