Suzlon Energy Ltd took its losing streak to fifth straight session, as the scrip hit a lower-circuit limit on Wednesday amid strong selling pressure. With this, the Suzlon Energy stock has plunged 24 per cent over it 52-week high of Rs 50.72 hit on February 2.
On Wednesday, the stock was locked at Rs 38.53, which was its 5 per cent lower circuit limit. The scrip has fallen 15 per cent in the 5-day selling spree. Data showed there were sell bids for 17,52,559 shares on BSE, with no buy bids.
Recently, JM Financial in a research note said that MNRE has reinstated the earlier bidding approach of ‘reverse auctions’ in a surprise move, which has resulted in limiting the bid size to 600MW for plain vanilla wind tenders. As per JM Financial, MNRE has mandated issue of bids on pan-India basis by SECI, NTPC, NHPC and SJVN and state agencies. But the brokerage believe the policy uncertainty is unlikely to have killer impact on Suzlon Energy. It sees high probability of policy reversal in due course given the market size is significantly more than manufacturing capacity and execution capability of the industry.
"The current move, however undesirable from policy uncertainty perspective, is likely to have insignificant impact given the large market size (over 10 GW per year) as evident from under-subscription, change in bid’s construct to RTC/FDRE (just 2 per cent wind only tenders) and, increasing share of C&I players. However, closely monitoring behaviour of industry in upcoming bids will be crucial for now. Despite prevailing policy uncertainties, we maintain our BUY rating on the stock with a target price of Rs 54 (based on a 27x FY26E EPS), underpinned by strengthening order book, enhanced financial health, and a robust bidding pipeline,"
Suzlon Energy shares are up 349 per cent in the last one year.
In a strategy note on February 13, Axis Capital said the key takeaways from its meeting with Suzlon Energy was that the FY24 may end up with under 3GW of wind capacity addition in India. This was against 2.28GW commissioned in FY23, and roughly the same quantum has been commissioned this fiscal till January 2024 end.
"Even with a pick-up in last two months of the fiscal, we may end up with 2.7-3.0GW, below our Axis estimate of 4.0GW published a few months back. In 9MFY24, Suzlon's market share of wind turbines commissioned is 29 per cent. Suzlon expects India to commission 5-6GW of wind capacity in FY25, after considering transmission evacuation and land acquisition challenges faced by the industry. Acquiring land can take up to 6-9 months, but availability of windy sites or cranes is not an issue," Axis Capital said.
"There is a massive ramp-up in transmission spending planned over 2022-27, which will ease evacuation challenges. Suzlon expects that by FY27-28, 8-10GW per annum of wind capacity can be commissioned in India, but that kind level cannot be achieved earlier," it added.