Suzlon Energy gains 3%, trades at 5-year-high levels

Shares of Suzlon Energy gained over 3 percent on June 30, extending the rise for the fourth session in a row as sentiment for the stock ran high, especially after positive earnings and large orders.

At 1:12pm, shares of Suzlon Energy were trading at Rs 15.30, around 3.73 percent higher on the National Stock Exchange. The stock is trading at a five-year high, with a 43 percent 6-month return and 143.24 percent annual return.

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India has amended its wind energy policy and has introduced a series of policy initiatives, including discontinuing reverse auctions, introducing wind-specific renewables purchase obligations (RPOs), and planning to auction 10GW per annum. These policies are expected to generate tailwinds for the industry.

Brokerage firm ICICI securities believes that Suzlon is best equipped to benefit from industry tailwinds and expects a sharp uptick in earnings FY24 onwards.

The company has a bullish stance on the stock on the back of Suzlon’s strong market leadership and improved balance sheet position, with reduced leverage. Suzlon has reduced its leverage to 1x Debt to EBITDA by restructuring its debt and by raising money through a rights issue. The renewable energy solutions provider, has a market share of 33 percent in India’s domestic market (based on total installations) with 20GW of operational wind power capacity globally, positioning it well ahead of its competitors, according to ICICI securities.

As of May 2023, Suzlon has booked 750MW worth of orders for the newly launched 3MW turbine.

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