Suzlon Energy Ltd continues to attract investor interest as its stock price surged 5% on Thursday, reaching Rs 55.39 on the BSE. The renewable energy giant has maintained a staggering 518.19% growth over the past two years, despite minor corrections in the recent past. According to fresh targets, the stock has a potential upside of up to 44%, with JM Financial setting a target price of Rs 80 and Nuvama Institutional Equities suggesting Rs 60.
- Strong Market Position: Suzlon Energy has a robust order book of 5,521MW as of January 2025, diversified across multiple states and industries.
- Recent Performance Boost: The company’s Q3 execution exceeded expectations, delivering 447MW compared to Nuvama’s estimate of 360MW.
- Positive Analyst Sentiment: Both JM Financial and Nuvama Institutional Equities have upgraded their recommendations to ‘BUY’ due to valuation comfort and strong execution.
Strong Order Book & Growth Potential
According to JM Financial, Suzlon Energy is well-positioned for significant growth due to its expanded manufacturing capacity, improved supply chain operations, and new leadership. The company’s ability to secure large-scale projects, such as those from NTPC Ltd, Torrent Power Ltd, and Jindal Renewables Ltd, further strengthens its market presence. Additionally, Suzlon has successfully secured land for several projects, ensuring better visibility for future execution.
Suzlon’s order book is its highest-ever at 5,521MW, with 92% consisting of 3x MW series turbines. A significant 58% of customers come from the commercial and industrial (C&I) segment, while 21% belong to PSUs. Notably, 81% of the orders exclude EPC scope, and projects are spread across seven states, demonstrating a strong pipeline of upcoming developments.
Key Milestones & Future Prospects
Suzlon Energy has secured India’s largest wind energy order of 1,166MW from NTPC Green and has also placed a bid for another 900MW+ tender from NTPC Green. The results for this bid are expected within the next 30-45 days. The company’s growing eligibility for PSU tenders further adds to its long-term growth prospects.
Analyst Upgrades & Earnings Beat Expectations
Nuvama Institutional Equities recently upgraded Suzlon from ‘Hold’ to ‘Buy’ due to valuation comfort following the stock’s recent correction. Suzlon’s Q3 execution was reported at 447MW, significantly higher than Nuvama’s forecast of 360MW. Additionally, its operating margin improved to 16.8%, outperforming the estimated 14.9%, mainly due to a higher Wind Turbine Generator (WTG) mix-led operating leverage.
Nuvama has revised its projections for FY25-27, factoring in improved execution estimates for FY25 (1.5GW versus 1.44GW), the Renom acquisition, and other charges. This revision resulted in a target price of Rs 60, valuing Suzlon at 35 times its estimated FY27 earnings plus DCF of O&M. With the recent price correction and robust financials, Nuvama now sees strong long-term potential for Suzlon Energy.
Conclusion: Is Suzlon Energy a Multibagger Stock?
With a strong order book, an improving operational framework, and bullish analyst recommendations, Suzlon Energy presents a compelling growth opportunity. While short-term fluctuations may persist, the company’s solid fundamentals and strategic project acquisitions suggest continued upward momentum. Investors looking for exposure in the renewable energy sector may find Suzlon Energy an attractive bet, with price targets ranging from Rs 60 to Rs 80.