The Suzlon Analyst: The Sushil Sharma-led analyst team at Nuvama Research met with the renewable company’s management “to gauge the business prospects.” However, the stock is not rated by the brokerage firm.
The Suzlon Thesis: In its latest note, the brokerage said that it expects the company to repair its Balance Sheet and return to strong growth led by regulatory changes and rising demand. The firm added that revenue growth and profitability are likely to accelerate in FY25 as regulatory changes in early 2023 will boost the order book/ revenue starting from FY24/FY25.
The firm noted that the company’s order book stands at 1.5 gigawatt (including the first two months of FY24). The management expects to execute an order book of 55–60% in FY24 at a high-single-digit EBITDA margin.
Talking about the favourable regulatory changes, the note mentioned four changes that the government made in early 2023. The first was the shift to a single-stage closed bidding from e-reverse open bidding, the second was composite bids for pooling of tariffs in multiple states, the third was the waiving of ISTS charges (extended till June 2025), and lastly, the focus on compliance of RGO/RPO (generation and purchase obligation of RE).
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As per the brokerage firm, these changes to revive wind energy and the 100GW capacity target by 2030 have created, on average, an annual market opportunity of 10GW.
Price Action: Suzlon’s share price was up 0.36% to trade at ₹13.90 in the late hours of trading on Monday.
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