Suzlon Energy stock gains 2% on bagging India's largest wind energy order

In the past 12 months, Suzlon Energy share price has skyrocketed 212 percent, more than tripling investors’ capital, while Nifty climbed 28 percent during the same period.

Shares of Suzlon Energy rose over 2 percent on September 9 as the company bagged India's largest wind energy order of 1,166 MW from NTPC Green Energy Limited, the Renewables Arm of NTPC.

Suzlon will install a total of 370 wind turbine generators (WTGs) of S144 equipped with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3.15 MW each at two projects of NTPC Renewable Energy Limited and one project of Indian Oil NTPC Green Energy Pvt. Ltd. This win takes Suzlon’s largest‐ever cumulative order book close to 5 GW as of September 3, 2024.

Suzlon on Friday announced that it has completed the acquisition of 51 percent of the equity share capital of Renom Energy. The renewable energy solutions provider further informed that with the said acquisition, Renom Energy has now become a subsidiary of company.

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In August, Suzlon Energy Ltd.'s Board approved the acquisition of a 76 percent stake in Renom Energy Services for Rs 660 crore, according to a BSE filing.

The deal will unfold in two phases: first, Suzlon will acquire 51 percent of Renom's shares for Rs 400 crore, followed by the purchase of an additional 25 percent within 18 months for Rs 260 crore.

ICICI Securities last week 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.

ICICI Securities 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.

Domestic brokerage JM Financial 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.

Also Read | Suzlon Energy makes Renom a subsidiary after completing 51% acquisition for Rs 400 crore

At 10:53 am, Suzlon Energy shares were trading 2.6 percent higher at Rs 76.56 on the National Stock Exchange (NSE). The stock has gained around 95 percent so far this year, outperforming Nifty's returns of 16 percent.

In the past 12 months, Suzlon has skyrocketed 213 percent, more than tripling investors’ capital, while Nifty climbed 28 percent during the same period.

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