Nuvama initiates coverage on Suzlon and Inox Wind, sees upside potential of up to 33%
Nuvama initiated coverage on Inox Wind and Suzlon Energy, with target prices suggesting an upside potential of 33% and 15%, respectively.
Nuvama has a ‘buy’ rating and a target price of Rs 195 on Inox Wind as it believes the company is one of the only two WTG and turnkey EPC companies in India, wherein annual wind demand is reviving to more than 12GW.
Inox seems to be a beneficiary of the regulatory tailwind and favourable market conditions, coupled with its order book climbing to new highs, the brokerage said.
The revival of Inox is led by the spike in evening power demand (non-solar hours), catalysing renewable energy tenders to move towards RTC/wind-solar-hybrid coupled with C&I demand from industrial consumers.
«Reviving macros in a duopolistic wind EPC market shall enable it to achieve OB/revenue CAGR of 44%/73% (FY24–27E),» said Nuvama.
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In Suzlon Energy’s case, Nuvama initiated a ‘buy’ rating on the stock with a target price of Rs 53, stating that the company’s growth visibility is backed by industry tailwind of 12–14GW TAM annually, technological edge (3MW-plus turbines) + 4.5GW-plus nacelle capacity, high-margin (45%) O&M services and balance sheet (D/E of 0.03x in FY24 versus 1.7x in FY23).
Further, Suzlon is the market leader in the WTG market with a 30% share and among the only two wind EPC suppliers in India, and Nuvama believes that Suzlon is capable of sustaining its lead in WTG/turnkey EPC execution,
