Suzlon shares may rise another 32%; Ratings agency upgrades on stronger finances
Suzlon has a 32% market share in India's wind turbines market and is likely to play a decisive role as domestic wind capacity ramps up to 100 GW from the current 45 MW, according to the brokerage.
Shares of Suzlon may head back to their recent peak of ₹50 per share, according to Anand Rathi Securities, which initiated coverage on the stock with a price target of ₹49.
Suzlon has a 32% market share in India's wind turbines market and is likely to play a decisive role as domestic wind capacity ramps up to 100 GW from the current 45 MW, according to the brokerage.
Anand Rathi Securities is factoring in a 64% net profit Compounded Annual Growth Rate (CAGR) over financial year 2024 - 2026 for Suzlon.
Given its dominant market position, Anand Rathi has ascribed a valuation multiple of 35 times financial year 2026 price-to-earnings estimates.
Adverse government policies, slower-than-expected pick-up in Wind Turbine Generators and keen competition are some of the key risks for Suzlon, Anand Rathi's note said.
Additionally, CRISIL Ratings has upgraded Suzlon's ratings to 'A-' with a positive outlook in alignment with the company's strengthened financial position.
"The rating upgrade factors in, higher than expected improvement in the margins of WTG business while maintaining healthy cash flow generation from the O&M services business, and an uptick in the order book providing visibility for future revenues," CRISIL wrote in its note.
CRISIL Ratings also upgraded Suzlon's ratings on the bank facilities of Suzlon to ‘CRISIL A-/Positive/CRISIL A2+’ from ‘CRISIL BBB+/Positive/CRISIL A2’.
Shares of Suzlon Energy are trading 0.8% higher at ₹37.40. The stock had made a recent high of ₹50.60, having risen 419% over the last 12 months.
First Published: Mar 27, 2024 10:26 AM IST
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