Buy Suzlon Energy, target price Rs 68: Geojit Financial Services

Geojit Financial Services has a buy call on Suzlon Energy with a target price of Rs 68. The current market price of Suzlon Energy Ltd. is Rs 62.35. Suzlon Energy Ltd., incorporated in 1995, is a Small Cap company with a market cap of Rs 84951.61 crore, operating in the Power sector.

Suzlon Energy's key products/revenue segments include Wind Turbine Generator, Sale of services, Other Operating Revenue, Scrap for the year ending 31-Mar-2023.

Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 2121.23 crore, up 3.76% from last quarter Total Income of Rs 2044.35 crore and up 48.47% from last year same quarter Total Income of Rs 1428.69 crore. The company has reported net profit after tax of Rs 200.60 crore in the latest quarter.

Investment Rationale
Geojit Financial Services has forecast WTG deliveries growth at 67% CAGR in FY24-27E, based on the management's stated expectations for wind installations in India. ( 5/7/10 GW for FY25E/26E/27E). Considering execution risks (land acquisition and transmission infrastructure deficiencies), they expect FY24-27E EPS growth at 61% CAGR. With the ROE expected to expand to 25% by FY27E, Geojit believes Suzlon's story is only developing. Recent order wins indicate preference for the turbine manufacturer among state, PSU, and C&I clients, and recent acquisition of Renom Energy can enable tapping into over 32GW of non -Suzlon O&M opportunities. Recent correction places the stock at attractive valuations. The brokerage values Suzlon Energy at 45X on Sept.2027 EPS of Rs.1.5, setting a target of Rs 68, and maintains a BUY rating.

Promoter/FII Holdings
Promoters held 13.25 per cent stake in the company as of 30-Sep-2024, while FIIs owned 23.72 per cent, DIIs 6.84 per cent.