Suzlon Energy: Anand Rathi bullish on turnaround story, retains 'buy' rating

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Suzlon Energy with a price target of ₹58 apiece, emphasising the company's notable market position in India's wind turbine sector and the company's achievement with net cash totaling ₹11.4 billion in FY24, marking the first instance since FY06. The brokerage said that the country's wind capacity installations are on track to rise to 8–9 GW by FY27, given the government’s insistent thrust and traction from commercial and industrial demand.The brokerage said that the company has faced turbulence in the past due to weak demand and high debt, hurting its prospects.

However, its balance sheet turned around sharply, and with greater demand aided by ambitious government targets, it expects deliveries of 1.5–2 GW for FY25–26. Also Read: Multibagger Suzlon Energy stock hits 5% upper circuit after company secures new wind power projectValuing the stock at a 35x PE on FY26e, considering robust growth prospects, the brokerage expects supportive government policies to sustain earnings growth and drive reratings.

"Supportive government policies would continue to drive earnings and reratings. Limited competition is an additional positive even though structural issues like grid connectivity, land acquisition-related challenges and keener competition would determine the pace of earnings," said Anand Rathi.

The company on Friday delivered robust Q4 results, with EBITDA reaching ₹3.6 billion and PAT at ₹2.8 billion, marking a notable increase of 54% and 314% year-on-year, respectively. These figures surpassed the brokerage's projections of ₹3.2 billion for EBITDA and ₹2.6 billion for PAT.Furthermore, for FY24, Suzlon reported EBITDA and PAT of ₹10.3 billion and ₹6.6 billion, representing year-on-year growth of 25% and 296%, respectively.