Buy Suzlon Energy; target of Rs 25: HDFC Securities

HDFC Securities' research report on Suzlon Energy

Suzlon’s (SUEL) 4QFY17 result was a beat on all counts, with volume at 554MW (+25% YoY) and realisations at Rs 82.2 mn/MW. EBITDA margins also improved (+70bps YoY to 14.1%),
leading to an APAT of Rs 2.7bn (ahead of our estimate of Rs 2.3bn). SUEL ended FY17 with volumes of 1,573 MW (+39% YoY).

Outlook

Hence, we take a conservative view on volumes (1,800/2,000 MW in FY18/19E) vs. mgmt guidance. Our positive stance on the sector remains intact. Reiterate BUY with a TP of Rs 25/share (10x Mar-19E EV/EBITDA).