Stock inaction - Suzlon

Suzlon Share movement of the Day 

Suzlon Share Movement of the Day

Suzlon Energy Ltd's shares experienced significant movement today, rising as much as 5% in early trade to ₹57.83 apiece on the NSE. By 9:26 a.m., the shares were trading 4.7% higher at ₹57.64 per share, despite a flat performance from the Nifty index. This impressive share movement reflects a year-to-date rise of 50.68% and a remarkable 203.85% increase over the last 12 months. The trading volume on the NSE stood at 1.43 times its 30-day average, with a relative strength index of 69.4, signaling strong market interest and positive sentiment towards Suzlon Energy.

Suzlon In-Depth Analysis of Q1-FY25 Performance

Suzlon Energy reported stellar growth in its financial performance for Q1FY25. The renewable energy company's consolidated net profit skyrocketed by 200% year-on-year to ₹302 crore, compared to ₹101 crore in the same period of the previous financial year. Revenue from operations surged 50% to ₹2,016 crore, up from ₹1,348 crore a year ago. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a significant increase, reaching ₹370 crore, an 86% jump from the ₹199 crore reported in Q1FY24. This robust performance was driven by the highest quarterly deliveries in seven years and a record order book of 3.8 GW, the largest in the company's 29-year history. 
Suzlon's net cash position as of June 30, 2024, stood at ₹1,197 crore, further strengthening its financial health. The company's EBITDA margin improved to 18.2% from 15.3% in the previous year, indicating enhanced operational efficiency. This exceptional growth in profitability and revenue reflects Suzlon's strategic initiatives and its strong market position in the renewable energy sector.

Suzlon Brokers' Overview

All five analysts tracking Suzlon Energy share have a 'buy' rating on the stock, reflecting strong confidence in the company's prospects. Domestic brokerage firm Anand Rathi Shares & Stock Brokers reiterated its positive outlook on Suzlon Energy, highlighting the company's well-positioned status to capitalize on rising demand. Following a recent plant visit, Anand Rathi increased its target price for Suzlon to ₹58 from ₹55, emphasizing the company's capacity expansion plans and automation initiatives.
Anand Rathi noted that Suzlon's Daman plant, which manufactures nacelles for wind turbines, has been instrumental in over 60% of the more than 20 GW turbines supplied globally. With a rated capacity of 2.7 GW, the plant's turbine capacity has risen to 3.1 MW. Suzlon plans to expand its Daman capacity and restart its Pondicherry plant in a phased manner based on demand. By FY26, the company aims to automate its plant to shorten turnaround times and enhance safety standards. The brokerage firm expects Suzlon to report revenue of ₹2,431.6 crore for the current quarter, an 80% YoY surge, with EBITDA margins at 16.8%.

Suzlon Future Outlook

Suzlon Energy is poised for continued growth, driven by a robust order book and strategic capacity expansions. The company's plans to automate its plants and expand its manufacturing capacity indicate a commitment to operational excellence and meeting rising demand. With India's wind capacity installations set to rise to 8-9 GW by FY27, Suzlon is well-positioned to benefit from the growing renewable energy market.
Anand Rathi's positive outlook on Suzlon reflects confidence in the company's ability to deliver strong financial performance, supported by rising demand from utilities and the commercial and industrial (C&I) segment. The brokerage firm factors in 1.5 GW and 2.2 GW deliveries for FY25 and FY26, respectively, reiterating a 'buy' rating with a target price of ₹58.
Potential risks include adverse government policies, slower-than-expected uptake in wind turbine generators (WTGs), and increased competition. However, Suzlon's strategic initiatives and robust market position provide a strong foundation for future growth.

Suzlon Strength & Weaknesses 

Conclusion

Suzlon Energy's Q1FY25 results highlight its strong financial performance and strategic growth initiatives. With a positive market outlook and robust demand for renewable energy solutions, Suzlon is well-positioned for sustained growth and value creation for its shareholders.