NEW DELHI: After trading around Rs 8-9 apiece level in May this year, share prices of renewable energy major Suzlon have doubled to Rs 16.80 apiece in a span of 7 weeks. As per market experts, a favourable wind energy policy, a fall in the company’s net debt and the winning of new contracts are pushing Suzlon shares, which for years have remained a penny stock.
Suzlon share price on Monday hit a fresh 52-week and five-year high of Rs 16.80 apiece after touching its upper circuit of 10%. “Favourable amendment to wind energy policy, plans to auction 10 GW of wind power, recognition of optimal mix of wind and solar, drastic fall in net debt to EBITDA and high market share in India are some points in favour of Suzlon at this point in time,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
He added, “At the same time, execution delays, lack of evacuation infra, policy changes, increased competition and deteriorating health of discoms remain key risks. Large equity base could restrict upside beyond a point.“
ICICI Securities has a BUY call and a target price of Rs 22 per share (assigning a multiple of 24x FY25E EPS).” “India has launched a series of policy initiatives: 1) single-stage closed bidding (vs reverse e-auction), 2) 10GW of wind auction per annum, and 3) wind-specific RPOs etc. These policies are likely to generate tailwinds for the industry and, we believe, Suzlon Energy (Suzlon) is best suited to reap benefits of the same,” said analysts at ICICI securities.