Suzlon Energy Limited (NSE: SUZLON) has emerged as a very active company in the renewable energy field. Its share increased by 5% and it closed at ₹ 65.33 on November 19, 2024. This is a part of the consecutive upswing, with the aid of buoyant market conditions and stock market traders’ confidence in the company’s managerial business development plans.
The stock fluctuating between ₹33.90 and ₹86.04 in the last 52-week shows that it’s a high risk stock but has high growth prospects. Going by the YTD figures, Suzlon’s 71.02% growth clearly indicates a sure shot winner than the S&P BSE SENSEX a mere 6.80% growth making Suzlon the ideal bet for those investors in search of high growth stocks.
The operational and profitability ratios show a good all-round performance of Suzlon Energy in the current fiscal and there is an indication of a turnaround on a sound revenue base. Key metrics include:
Revenue (TTM): ₹78.41 billion
Profit Margin: 12.24%
Return on Equity (ROE): 23.70%
Diluted EPS (TTM): ₹0.71
Currently the company’s market capitalization is ₹ 893.98 billion and the debt to equity is 5.90%. However, comparing the P/E ratio of 92.01, with overall growth factor and enhanced operating efficiency of the company, it is rather defensive.
Over a five-year period, Suzlon has delivered a staggering return of 2,864.54%, driven by India’s renewable energy transition and Suzlon's dominance in wind turbine manufacturing.
In its report, Geojit Financial Services has maintained an ‘order’ to ‘buy’ rating for Suzlon stating the company has posted excellent growth numbers coupled by reasonable valuations. Deliveries of wind turbine generators are expected to grow at a CAGR of 67% during the company’s five-year period which ends in FY2027.
Morgan Stanley move to ‘overweight’ with the target price of ₹71 for Suzlon’s shares seems to hold a lot of confidence in the business model. The brokerage pointed at a huge order book at Suzlon and a slight retreat to ₹86, a one-year high as a good entry point.
Currently, Suzlon's ongoing operations and maintenance market is greater than 32 GW and with acquiring Renom Energy, the company is set to get into over 32 GW of operations and maintenance business other than Suzlon. Also, vertically, it serves state utilities, PSUs and C&I clients which shows its competitiveness.
The stock of Suzlon has displayed significant bullish movement after pulling up from a significant support level of ₹53 as could be observed on the figure above. At present, the stock is priced at ₹65.33, and any rise above ₹67 is a challenge for the stock. A break above this level would target ₹85 which could take Suzlon to ₹50 on the downside if it fails to break ₹67.
The higher highs and higher lows on the graphical representation point to an uptrend that works well for the momentum traders as well as the long hold investors thus making Suzlon a good option for these kinds of investors.
Leader in India’s renewable energy sector with a robust order pipeline.
Strong financial recovery and profitability metrics.
Attractive growth opportunities driven by India's renewable energy push.
High P/E ratio relative to earnings growth.
Execution risks related to land acquisition and infrastructure challenges.
Volatility in stock price due to profit booking and market corrections.
Thus, taking in mind that Suzlon has good and sound financial fundamentals, good growth prospects, and lowering in price recently, the stock as a long-term investment is recommended to be bought. For the short-term traders, they can as well open their positions at the breakout above 67 with a target at 85. Conservative traders may take half stakes in the hopes of avoiding jeopardizing the entire bullish campaign.
Suzlon Energy’s stock continues to shine in the renewable energy space, bolstered by strong financial performance, strategic acquisitions, and bullish market sentiment. With the potential for significant upside, Suzlon is well-positioned to deliver substantial returns for investors in the long term. However, monitoring execution risks and market volatility is crucial for informed decision-making.