News Mania Desk/Agnibeena Ghosh/12th August 2024
Suzlon Energy, a leading player in the renewable energy sector, has been making headlines as its stock continues to soar, reaching a multi-year high. On August 12, Suzlon’s shares hit the 5 percent upper circuit on the National Stock Exchange (NSE), climbing to Rs 80.36. This marks the highest level for the stock since March 2010, reflecting a remarkable resurgence in its market performance.
In the past month alone, Suzlon has delivered a staggering 47 percent return, adding to its already impressive performance over the year. The stock, which recently crossed the significant milestone of Rs 1 lakh crore in market capitalization, has now surged 300 percent over the past year, quadrupling the investment of those who held onto the shares.
The recent rally in Suzlon’s stock can be attributed to several key factors. Notably, the company executed definitive agreements to acquire a 76 percent stake in Renom Energy Services Private Limited (Renom) from the Sanjay Ghodawat Group (SGG). This acquisition is a strategic move for Suzlon, marking its entry into the multibrand Operations and Maintenance Services (OMS) sector, a move that analysts believe will enhance the company’s market presence and create significant value.
Global financial giant Morgan Stanley has taken note of Suzlon’s promising trajectory, issuing an overweight rating with a target price of Rs 73.4 per share. This target has already been surpassed, indicating strong investor confidence in the company’s growth potential. Morgan Stanley highlighted that the acquisition of Renom Energy Services, with an implied valuation of 4x price-to-sales, is seen as more affordable compared to its peers, further bolstering investor sentiment.
Additionally, Prabhudas Lilladher, a well-known brokerage, has identified a higher low formation pattern on Suzlon’s daily chart, suggesting that the stock has regained momentum. The brokerage has set potential targets of Rs 82 and Rs 98 for the stock in the near future, advising investors to maintain a stop loss at Rs 71 while holding onto their positions for further gains.
Suzlon’s acquisition of Renom Energy Services is expected to provide the company with access to new sites and emerging opportunities in the renewable energy sector. With India’s ambitious target of achieving 100 GW wind energy capacity by FY30, Suzlon is strategically positioned to capture a significant share of the 32 GW non-Suzlon OMS market, which includes a 10 GW immediate opportunity. This acquisition is anticipated to enhance Suzlon’s capabilities, expand its market reach, and solidify its position as a leader in the renewable energy space.
JM Financial, another prominent brokerage, has maintained its ‘buy’ rating on Suzlon’s stock, echoing the positive sentiment around the company’s future prospects. The brokerage believes that Suzlon is poised to leverage the Renom acquisition to tap into new growth opportunities, particularly in the repowering of existing sites, further strengthening its foothold in the market.
As of 1:23 pm on August 12, Suzlon Energy’s shares remained locked at the 5 percent upper circuit, with the stock trading at Rs 80.36 on the NSE. The company’s market capitalization has now surged to Rs 1.1 lakh crore, underscoring the tremendous value that Suzlon has generated for its investors.
With a year-to-date gain of 108 percent, Suzlon has significantly outperformed the Nifty 50, which has risen by just over 12 percent during the same period. As the company continues to expand its market presence and capitalize on new opportunities, Suzlon Energy’s stock remains a compelling choice for investors looking to ride the wave of growth in the renewable energy sector.
