This energy company's stock is ready to give sky-high profits!
Suzlon Energy shares rose 5 per cent on Wednesday, january 29, after strong december quarter results. Leading brokerage firm Nuvama Institutional Equities recently upgraded its rating on this stock from 'Hold' to 'Buy'. Looking at the company's excellent performance and increase in order book, the brokerage firm has become bullish about this stock.
Company's excellent performance
Nuvama said in its report that Suzlon Energy completed projects of 447MW in this quarter, while the brokerage expected 360MW. The company's operating margin reached 16.8 per cent, which is higher than the previously estimated 14.9 per cent. This increase was due to high wind turbine generator (WTG) mix-led operating leverage.
In addition, the company's order book has reached an all-time high of 5.5GW, further strengthening the prospects for future revenue growth. According to Nuvama, the impact of interest expenses and increased depreciation was seen in the third quarter due to costs related to the Renome acquisition, but the management expects it to normalize in the upcoming quarters.
Benefit of government tenders
The brokerage firm believes that Suzlon Energy will be a major beneficiary of tenders issued by the government of India. Suzlon is likely to get large orders under new tender models like FDRE/RTC/Hybrid, which will further strengthen the company's financial position. Nuvama has set a 12-month target price of Rs 60 for Suzlon Energy's stock. The company is adding new production lines in Ratlam and jaisalmer to increase its production capacities, which will further improve its growth prospects.
Journey from Rs 10 to Rs 86
The stock of Suzlon Energy was in the range of Rs 8-10 in May 2023. After this, the stock showed a great rally and reached a high of Rs 86 in september 2024. However, after this it declined by about 34 percent. After the excellent results of the december quarter, now brokerage firms are once again taking a positive view on this stock.
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