Suzlon Energy Hits 5% Upper Circuit on Morgan Stanley Earnings Boost Prediction

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Suzlon Energy Hits 5% Upper Circuit on Morgan Stanley Earnings Boost Prediction

Morgan Stanley has a target price of ₹73 for the stock, noting that this new contract enhances earnings visibility for FY26-27. On Monday, Suzlon Energy secured India's largest wind energy order from NTPC Green Energy Limited, a subsidiary of NTPC Limited.

September 10th, 2024 News

Suzlon Energy, India's leading renewable energy solutions provider, surged by 5% today, reaching ₹78.05 per share. This sharp rise follows a positive outlook from global brokerage firm Morgan Stanley, which maintained its 'Overweight' rating on the stock and set a target price of ₹73. The surge comes in response to Suzlon’s recent acquisition of a 1.17 GW wind energy project from NTPC Green Energy Limited, a subsidiary of NTPC.

Key Highlights:

Morgan Stanley Forecast: The firm predicts that Suzlon’s earnings visibility will improve for FY26-27, largely due to the NTPC order.
NTPC Deal: On Monday, Suzlon secured the largest wind energy contract in India, involving 370 wind turbines with a combined capacity of 1.17 GW.
Target Price: Morgan Stanley has set a target of ₹73 per share for Suzlon, indicating strong future growth potential.

Project Details:

Suzlon’s new order from NTPC Green Energy involves the installation of 370 wind turbine generators (WTGs) of the S144 model. Each turbine has a rated capacity of 3.15 MW, and the project will be executed across multiple locations in Gujarat for NTPC Renewable Energy and Indian Oil NTPC Green Energy Pvt. Ltd.

The S144 wind turbine is the largest in India, designed to operate efficiently even at low-wind sites. With hub heights reaching 160 meters, the S144 turbine boasts a generation capacity 40-43% higher than Suzlon’s previous models, making it a game-changer in optimizing wind resources at higher altitudes.

Suzlon's Financial and Technological Strength:

Suzlon’s financial health continues to improve, with the company reporting a net cash surplus of ₹1,197 crores as of June 30, 2024. This positions the company well for future capital expenditures, particularly in blade mold technology. Suzlon has also announced plans to increase its investment in technology and process improvements, aiming to stay ahead in the renewable energy market.

The company’s S144 WTG model, introduced in FY24, highlights Suzlon's ability to offer versatile solutions for various wind regimes. The fleet has demonstrated its ability to increase power generation significantly, making Suzlon a key player in India’s wind energy sector.

India’s Wind Energy Outlook:

India’s wind energy sector is expected to experience strong growth, driven by hybrid renewable energy (RE) projects that combine wind and solar power. The market for wind energy, which had seen a slowdown, is now rebounding, with a projected capacity of 4.8 GW by 2025, ahead of the expiration of the interstate transmission system (ISTS) in June 2025.

As of March 31, 2024, India’s total installed wind capacity stood at 45,866 MW, an 8% increase from the previous year. The highest capacity additions were recorded in Gujarat, which added 1,744 MW, followed by Karnataka (725 MW), Tamil Nadu (586 MW), and Maharashtra (195 MW). Gujarat continues to lead the country with a total installed wind capacity of 11.72 GW, followed closely by Tamil Nadu (10.60 GW) and Karnataka (6.02 GW).

Conclusion:

Suzlon Energy’s recent order wins, including the landmark deal with NTPC, have strengthened its position in India’s renewable energy landscape. With Morgan Stanley’s positive outlook and the growing demand for hybrid renewable projects, Suzlon is poised for significant growth in the coming years. The company's advanced technology and strong financial position make it a key player in India's energy transition.