Suzlon Energy Ltd.’s shares are trading near levels last observed in 2011. Brokers like ICICI Securities claimed that Suzlon Energy had turned the corner recently, raising Rs. 20 crore through QIP and paying off debt. Analysts noted that Suzlon Energy’s December quarter results demonstrated a strong financial turnaround, which was made possible by a decrease in financial costs. However, Suzlon Energy shares appear to be pricing in the majority of the benefits, indicating a few price targets.
As of December 23, Suzlon Energy had a healthy order backlog of 3.1GW, five times its trailing 12-month execution of 620 MW. The company has seen strong order inflows totaling 2.9GW thus far in FY24.
ICICI Securities, which has maintained a “ADD” rating and revised its target price for the stock from Rs 36 to Rs 48, stated that “the order inflow pipeline still remains strong in the medium term.” This puts the stock’s valuation at 35 times FY26E EPS of Rs 1.4 per share. Positives appear to have been fully priced in, as Suzlon Energy shares had reached a decadal high of Rs 50.72 at the time this report was written.
In comparison to the same quarter last year, when it made Rs 78.36 crore, the renewable energy solutions provider reported a 159.11 percent YoY increase in net profit for the December quarter, coming in at Rs 203.04 crore. According to ICICI Securities, the O&M segment was responsible for all of Suzlon’s quarterly profitability. With an Ebitda break-even level of 600 MW annually, the WTG segment should begin to contribute as execution improves.
According to JM Financial, the results of the December quarter met its projections and there was an improvement in business visibility. It was mentioned that 9 GW of FDRE (Firm and Dispatchable Renewable Energy) projects, which normally have at least a 40% wind component, are among the 15 GW of renewable projects up for bid. Suzlon Energy has a healthy pipeline of future opportunities, as there are also 2.6 GW of pure wind projects up for bid.
