Suzlon Energy Shares Surge Following Major Contract Win
On September 10, shares of Suzlon Energy experienced a remarkable 5% increase, hitting the stock’s upper circuit limit. This surge was fueled by a positive rating from the foreign brokerage firm Morgan Stanley, which assigned an ‘overweight’ rating and set a target price of Rs 73 for the stock. The boost in shares is particularly impressive in light of Suzlon’s recent announcement that it secured a significant order totaling 1.17 gigawatts (GW) from NTPC Green Energy Ltd.
Major Contract and Its Implications
This order marks Suzlon’s first significant engagement with a government company in a considerable amount of time, leading Morgan Stanley to describe it as a pivotal achievement for the firm. Previously, Suzlon had been ineligible to bid for government-linked projects due to its negative net worth. However, analysts believe this contract could enhance the company’s earnings considerably during the fiscal years 2025-2026, with potential long-term benefits as more opportunities arise in the sector.
Details of the Wind Energy Order
As per the official communication to stock exchanges, Suzlon will be delivering 1,166 megawatts (MW) of capacity, making it the largest wind energy order in India to date. Under the agreement, Suzlon will supply wind turbines and undertake installation and commissioning tasks in Gujarat. Furthermore, the company will provide ongoing operations and maintenance services post-commissioning.
Order Breakdown
| Order Summary | Details |
|---|---|
| Wind Turbines | 370 Wind Turbine Generators (WTGs) |
| Tower Type | Hybrid Lattice Tubular (HLT) |
| Rated Capacity | 3.15 MW each |
| Target Projects | Two NTPC Renewable Energy Limited projects, One project of Indian Oil NTPC Green Energy Private Limited |
Strategic Remarks from Suzlon Leadership
Commenting on the major win, Girish Tanti, Vice Chairman of Suzlon Group, stated, “This is our first direct wind energy order from NGEL, which marks Suzlon’s glorious comeback in the PSU segment.” JP Chalasani, CEO of Suzlon Group, expressed optimism regarding future collaborations, noting that this order could pave the way for more projects between the companies.
Stock Performance and Market Position
As of approximately 2 PM on the day of the announcement, Suzlon Energy shares were locked at their upper circuit limit of Rs 78.05, reflecting a significant growth of 5% on the NSE. Over the course of 2024, Suzlon Energy has emerged as a multibagger stock, boasting a staggering increase of around 102% since the beginning of the year, far outpacing the Nifty’s mere 16% rise during the same period.
Conclusion
This significant order from NTPC not only enhances Suzlon’s operational capabilities but also revitalizes its standing in the renewable energy sector. As investors keenly watch Suzlon’s developments, the company’s recent achievements seem promising for sustained growth in the coming years.
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