As Suzlon shares continued to surge upwards after posting strong first-quarter results, Nuvama Institutional Equities and ICICI Securities downgraded the stock.

What Happened: Suzlon in its June quarter results reported a massive 200% jump in net profit to ₹302.29 crore, while the company's revenue shot up 49% to ₹2,015 crore. EBITDA for the quarter came in at ₹370 crore, up over 86% from the ₹199 crore posted in the corresponding quarter of the previous year. 

Brokerage Views: Nuvama downgraded the stock to "hold" and set a target price of ₹64, reasoning that while the company's long-term prospects look bullish, the increase in order inflow and profit are already factored into the current price in the short term. 

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The company’s Q1 operating margin surpassed expectations and drove net profit up. The company's execution of 274 megawatts in Q1, was higher than analyst estimates of 250 megawatts. The brokerage expects the firm’s execution to increase further to 1.4 gigawatts and 3 gigawatt for FY25 and FY27, respectively. 

Strong order inflow at 1,162 megawatts against expectations of 800 megawatts led to an all-time high order book of 3.8 gigawatts, which can be executed over 18-24 months, leading to revenue visibility, the brokerage added. 

ICICI Securities downgraded the stock to"add" from "buy" with a target price of ₹70 on the back of the sharp jump in the stock price as the reason for the downgrade.

Order inflow for the company in Q1 stayed healthy at 1.2 gigawatts, which took the company's order book to 3.8 gigawatts. The order inflow outlook remains strong, while hybrid and wind renewable energy bidding has remained strong across FY24 and in Q1.

Price Action: Shares of Suzlon rose 4.13% to ₹63.23 on Thursday. The stock has risen 10% in the last two sessions after posting its Q1 results.

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