Suzlon Energy, a prominent player in the wind turbine manufacturing sector, is witnessing a significant resurgence in its share price following a major contract win and favorable insights from Morgan Stanley. The company’s stock price climbed by 5 percent, reaching the upper circuit of Rs 78.05, bolstered by a recent order from NTPC Green Energy.
Market Response to Recent Developments
The momentum in Suzlon’s shares reflects positive investor sentiment following a substantial order of 1166 MW received from NTPC Green Energy. Despite this upward movement, the stock is still 7.52 percent below its one-year peak of Rs 84.40, achieved on August 13, 2024. Additionally, a block deal involving 3.7 crore shares, representing a 0.3 percent stake in the company, was executed at a price of Rs 77, further invigorating market interest.
Details of the NTPC Order
Suzlon’s landmark order from NTPC involves the installation of 370 S144 wind turbine generators, each boasting a capacity of 3.15 MW, utilizing advanced Hybrid Lattice Tubular (HLT) towers. This order encompasses two projects under NTPC Renewable Energy in addition to one project linked with Indian Oil NTPC Green Energy. With this order, Suzlon’s total order book has expanded to nearly 5 GW as of September 3, marking a significant milestone for the company.
Strategic Acquisition of Renom Energy
In conjunction with its operational advancements, Suzlon has finalized the acquisition of a 51 percent equity stake in Renom Energy, a strategic move that has led to additional positive momentum for its shares. The transaction, valued at Rs 400 crore, is part of a broader agreement initially approved in August, with plans to acquire a total of 75 percent stake for Rs 660 crore. The remaining 25 percent stake is set for acquisition within 18 months for Rs 260 crore, as disclosed in exchange filings.
Morgan Stanley’s Outlook on Suzlon
Morgan Stanley has taken a bullish stance on Suzlon, asserting that the recent government contract signifies a turnaround after a prolonged period of financial challenges. The brokerage firm, which has maintained its “overweight” rating for Suzlon, set an initial target price at Rs 73.4—now surpassed following the recent surge. Out of the five analysts covering Suzlon, three recommend a buy, while two suggest holding.
Target Price and Analyst Ratings
| Firm | Rating | Target Price (Rs) |
|---|---|---|
| Morgan Stanley | Overweight | 73.4 |
| ICICI Securities | Buy | 80.0 |
Conclusion
Suzlon Energy’s recent achievements and market performance highlight its potential for growth within the renewable energy sector. Despite past financial difficulties, current developments, including significant orders and strategic acquisitions, suggest a revitalized future for the company. Investors are encouraged to monitor Suzlon’s performance closely in the coming months, especially as the renewable energy landscape continues to evolve.
Disclaimer:
The views expressed here are those of the authors and not necessarily those of any associated organizations. Always seek advice from certified financial experts before making investment decisions.
