Suzlon Energy has started bidding for PSU (including NTPC) tenders, JM Financial said.
Suzlon Energy's present is promising while future is cautiously bright, JM Financial said in its latest note, as it retained it 'Buy' call on the stock with an unchanged target price of Rs 54 per share. The domestic brokerage said Suzlon Energy's order book is healthy and its bid pipeline is heathier. It sees a strengthening of balance sheet but cited execution challenges for step-up in annual capacity addition beyond 5GW.
Suzlon Energy Ltd, whose shares were up 340 per cent in the past one year, has received 2,929 MW of orders during FY24 (652 MW in FY23). The management is resolute in taking high-margin and high-value orders bundled with LT services agreement. In May, 402 MW of additional orders were received, taking total order inflows to a healthy 3,331 MW with a diversified mix (83 per cent 3 MW series; 58 per cent C&I customers; and 66 per cent non-EPC scope; spread across six state, JM Financial said.
Suzlon Energy has started bidding for PSU (including NTPC) tenders, JM Financial said. Since Jan 1, 2023, a total of 44 tenders with 43GW for utility-scale vanilla wind and various wind-combinations have been issued, which have an estimated wind component of 15GW, giving a healthy pipeline of opportunities going forward, it said.
"This excludes opportunities from C&I segment. The company doesn’t anticipate an increase in intensity of competition, given the large market size, limited players and it being only turnkey OEM player, JM Financial said.
With increasing deliveries of wind turbine generator (WTG), Ebitda for Suzlon Energy Ltd sharply improved in FY24 and FY23. The installed capacity base for the Operations & Maintenance Services (OMS) business increased to 14.7 GW in FY24 from 13.9 GW on FY23.
"Current order book of 3,372 MW is due for execution up to FY26, with a major part to be delivered during FY25 as per the guidance from the management. Going forward, an increasing share of C&I projects (58%), diversity in orders from 7 States, higher share of non-EPC orders (66%) and a favorable policy environment (pooling of tariff) bode well for execution. However, availability of land and ROW (Right of Way) remain challenges for a significant scale-up," it said.
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