Suzlon Energy shares rise 2% after Investec initiates coverage with ‘buy’

Suzlon Energy shares rose 2 per cent to Rs 56.15 in morning deals on February 21, extending gains for the third consecutive session, after brokerage firm Investec initiated coverage with a ‘buy’ call, suggesting positive levers for growth.

The domestic brokerage has set a price target of Rs 70, indicating an upside potential of 27.5 percent from the last close of Rs 54.88 on the National Stock Exchange. Suzlon Energy stock has declined 12 percent since the beginning of the year.

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 strong return ratios and a growing order book of 5.5 GW. A well-optimised supply chain and a strong pipeline of bids further strengthen its outlook.

Investec estimates Suzlon’s revenue and PAT to grow at a CAGR of 55 percent and 66 percent, respectively, during FY24-27, with ROE expected to grow from 28.5 percent in FY24 to 32 percent by FY27.

In the third quarter, Suzlon Energy reported a consolidated net profit of Rs 387 crore. This represents an impressive growth of nearly 91 percent from the net profit of Rs 203 crore recorded in the corresponding quarter of the previous fiscal. The company’s revenue from operations also witnessed strong growth.

It reported a revenue of Rs 2,969 crore in the third quarter, up 91 percent from the revenue of Rs 1,553 crore recorded in the year-ago period. JP Chalasani, Chief Executive Officer, Suzlon Group, said, “We are experiencing consistent growth quarter-on-quarter, with each of our businesses operating as strong, independent entities, driving performance.

The expansion of our manufacturing capacity in India is progressing as planned to meet our record-high order book of 5.5 GW. With our ramp-up strategy in place and operational preparedness at optimal levels, we can sustain the momentum, create long-term value for our stakeholders, and play a key role in driving India’s renewable energy ambitions.”

At around 9:20 am, the company’s shares were trading at Rs 55.99, up 1.9 per cent from its previous close on the NSE. Suzlon Energy stock is trading 36 per cent off its 52-week high of Rs 86.04.