Is Rs 100 the Next Big Milestone for Suzlon? After a 9x Rally in 18 Months
Suzlon's capital-raising plans aim to boost execution capacity and secure additional orders, aligning with its asset-light strategy, which involves selling non-core assets, a value-accretive move for the company.
India’s leading player in the wind energy sector has hit the upper circuit of 5 per cent for the second consecutive session on Wednesday, September 11, with the share price up over 10 per cent. Shares of Suzlon Energy have risen 10 per cent in the last two sessions.
The stock is gaining momentum following the company's win of India's largest renewable energy order from NTPC Green Energy, worth nearly 1.17 GW, taking its cumulative order book to an all-time high of nearly 5 GW.This deal is a significant milestone for Suzlon, as it has secured a PSU order after a long hiatus. Post-deal, management expressed confidence in securing more projects from NTPC in the future. This large contract is expected to enhance Suzlon's earnings visibility for the coming fiscals.
The stock has attracted significant buying interest after the company raised funds and cleared nearly Rs 1,500 crore in debt during FY24, turning its net worth positive for the first time in a decade.
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Suzlon’s stock has surged 9x between April 2023 and September 2024. During this period, Suzlon’s order book has increased 8-fold, including the recent order from NTPC Green Energy.
Suzlon recently sold its iconic corporate office, Suzlon One Earth, for Rs 440 crore. However, the property will be leased back to Suzlon for five years, with sub-leasing and licensing rights post-sale. This move is expected to strengthen the company’s financial position and operational efficiency, with the asset-light strategy proving to be value-accretive for Suzlon. Suzlon's plans to use the capital raised are in line with its April 2022 strategy, which focuses on enhancing execution capacity and securing additional orders while selling non-core assets.
Suzlon, a leading producer of wind turbines, is known for its comprehensive wind power solutions, which cater to the growing demand for clean energy. It also offers a range of solar energy services, including solar irradiance assessment, land acquisition, infrastructure, power evacuation, supply chain, installation, commissioning, and life cycle asset management. The share price is currently locked in the upper circuit at Rs 81.95, with a market capitalization of over Rs 1,11,780.33 crore. So far in 2024, the stock has doubled in value, delivering more than 112 per cent returns on a year-to-date basis.
Disclaimer: The article is for informational purposes only and not investment advice.