Why Suzlon Shares Jumped Back Into The Green Today

Suzlon‘s share price jumped back in the green on Wednesday after closing in the red on Tuesday.

What Happened: The stock is upbeat today as Anand Rathi initiated coverage on the stock with a target price of ₹49. The target indicates an around 32% upside from the stock’s last closing price of ₹37.10.

The analysts noted that Suzlon holds a substantial 32% market share in India’s wind turbines market and is poised to be a key player as the domestic wind capacity escalates from the current 45 MW to 100 GW.

Anand Rathi analysts anticipate a robust 64% net profit Compounded Annual Growth Rate (CAGR) for the wind energy major over the financial year 2024 to 2026.

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However, the research note highlights several key risks for Suzlon, including adverse government policies, a slower-than-expected uptake in Wind Turbine Generators, and intense competition within the industry. As per the analysts, these factors could potentially impact Suzlon’s performance adversely despite its significant market position and growth prospects.

On another note, CRISIL Ratings has elevated Suzlon’s ratings to ‘A-‘ with a positive outlook, reflecting the company’s improving financial standing. The upgrade is attributed to Suzlon’s notable enhancements in the margins of its Wind Turbine Generator (WTG) business, coupled with consistent cash flow generation from its Operations and Maintenance (O&M) services segment. Additionally, an increase in the order book has contributed to improved revenue visibility, as outlined in CRISIL’s note.

Price Action: Suzlon’s share price was up 3.10% to trade at ₹38.25 in early trade on Wednesday.

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