Suzlon Energy shares up 5% today; Buy stock, valuation attractive, says Geojit 

Shares of Suzlon Energy Ltd climbed 5 per cent in Tuesday's trade as it received a 'Buy' call from Geojit Financial Services and a rating upgrade from Morgan Stanley. Geojit Financial Services and Morgan Stanley believe the recent correction has placed the stock at attractive valuations.

Morgan Stanley upgraded the renewable energy solutions provider to 'Outperform' and suggested a price target of Rs 71 while Geojit finds the stock worth Rs 68 apiece. On Tuesday, Suzlon Energy shares were locked at their 5 per cent upper circuit limit at Rs 62.37. With this, the scrip has jumped 15.43 per cent in three sessions.

Suzlon Energy is a vertically integrated wind turbine manufacturer and O&M service provider with over 20.9GW of installed capacity.

"We forecast WTG deliveries growth at 67 per cent CAGR in FY24-27E, based on the management’s stated expectations for wind installations in India. Considering execution risks, we expect FY24-27E EPS growth at 61 per cent CAGR. With the ROE expected to expand to 25 per cent by FY27E, we believe Suzlon’s story is only developing," Geojit said.

The recent Suzlon Energy 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, Geojit said.

Geojit values Suzlon Energy at 45 times September 2027 EPS of Rs1.50.

Suzlon Energy, Morgan Stanley said, has a strong business moat, with a large 5.1GW order backlog executable over the next 24 months. Morgan Stanley, ET NOW reported, said Suzlon Energy has been prudent in taking up orders with higher offtake visibility. It said India's competitive intensity is lower and expects Suzlon Energy's market share to improve to 35-40 per cent by FY27.

The brokerage said India's wind addition may drive 32GW or $31 billion of orders over FY25-30 for wind OEMs and that the recent steep decline in the Suzlon Energy stock price is an credible opportunity to accumulate the stock.

Earlier, Ventura Securities in a note said Suzlon Energy Ltd is a great business but not at a great price. This brokerage had suggested a 'Sell' rating on the renewable energy solutions provider with a price target of Rs 50 over the next 24 months.

This was against a Suzlon Energy price target of Rs 81 that JM Financial suggested for the next 12 months and Rs 67 that Nuvama Institutional Equities assigned for the same timeframe.