Suzlon Energy share price target at Rs 58.50? Morgan Stanley initiates coverage with 'Overweight' rating

Foreign brokerage Morgan Stanley has reportedly initiated coverage on Suzlon Energy Ltd with an 'overweight recommendation, saying the renewable energy solutions provider is much stronger after deleveraging and leaner after cutting fixed operation costs.

Suzlon Energy 2.0 is well positioned to benefit from India's energy transition, CNBC TV 18 reported Morgan Stanley as saying. Business Today could not independently verify the report.

Shares of Suzlon Energy are up 15 per cent in the last one month and 23 per cent year-to-date. At Friday's closing price of Rs 47.61, Morgan Stanley's target suggests 23 per cent potential upside. As per the report, the foreign brokerage believes the market is not fully appreciating Suzlon Energy's growth potential. It sees wind orders of 32 GW over the next five years. Morgan Stanley, as per CNBC TV18 said, earnings for Suzlon Energy may grow at 57 per cent compounded annual growth rate in FY24-27.  

#CNBCTV18Market | Morgan Stanley initiates an overweight call on Suzlon. Says co much stronger after deleveraging, & leaner after cutting fixed operation costs pic.twitter.com/xtQuBMljSA

— CNBC-TV18 (@CNBCTV18Live) June 3, 2024

While upgrading its target price on the Suzlon Energy stock recently, ICICI Securities said FY24 was a real turnaround year for Suzlon Energy, with becoming net debt free, strong execution growth of 10 per cent to 710 MW and order inflow of 3.1 GW in FY24. JM Financial maintained its 'Buy' rating on the stock and did not tinker with the target price.

"Suzlon has got back into shape after a tumultuous period over the last decade. Over the past three years, it has reduced its debt from Rs 12,000 crore in FY20 to nil in FY24 through various debt to equity conversions. With that, it has recently become net cash positive with cash reserve of INR 11bn as of Mar’24, after a successful equity raise worth Rs 2,000 crore in Q2FY24 for debt reduction," ICICI Securities said.