Suzlon Energy stock climbs 5%; Morgan Stanley shares target price
Suzlon Energy target price: JM Financial has a target of Rs 71 on Suzlon Energy. Geojit Financial Services finds the stock worth Rs 73. Anand Rathi Shares & Stock Brokers' target stands at Rs 68 apiece.
- Aug 7, 2024,
- Updated Aug 7, 2024 10:15 AM IST
Shares of Suzlon Energy Ltd climbed 5 per cent in Wednesday's trade after the foreign brokerage Morgan Stanley maintained its 'overweight' recommendation on the largest domestic renewable energy solutions provider, with a target price of Rs 73.40 per share. The price target was about 11 per cent higher than Suzlon Energy's Tuesday's closing price.
Suzlon signed executed definitive agreements for the acquisition of a 76 per cent stake in Renom Energy Services, in two tranches, from the Sanjay Ghodawat Group (SGG). Renom is the largest Multi Brand Operations and Maintenance service (MBOMS) provider in the country with assets of 1,782 MW in Wind, 148 MW in Solar, and 572 MW in BOP under maintenance across customer segments.
Following the developments, the stock climbed 4.81 per cent to hit a high of Rs 69.45 on BSE. Morgan Stanley reportedly said that the implied valuation of 4 times price-to-sales for the deal is cheaper than that of Suzlon Energy's listed peer. JM Financial has a target of Rs 71 on Suzlon Energy. Geojit Financial Services has a target of Rs 73 on Suzlon Energy. Anand Rathi Shares & Stock Brokers' target stands at Rs 68 and Nuvama Institutional Equities' at Rs 64.
Suzlon Energy said the first tranche of the Renom Energy deal would involve the acquisition of a 51 per cent stake for a consideration of Rs 400 crore. In the second tranche, Suzlon Energy would acquire an additional 25 per cent stake within 18 months from the acquisition of the first tranche for a consideration of Rs 260 crore.
"The closure of the transaction is subject to the completion of certain condition precedents. This strategic acquisition will help unlock Renom's core potential and position it from a place of strength to become a leading Independent Service Provider (ISP) and custodian of multi brand renewable energy assets," Suzlon Energy said.
Girish Tanti, Vice Chairman, Suzlon Group, said on the acquisition, "With India's target to achieve 500 GW of renewable energy installations by 2030, we shall see a multitude of different technologies and wind turbines of various makes in the market going ahead. Renom has emerged as a single largest player in this domain with great strength and potential to tap further into this market segment. This acquisition aligns with Suzlon Group's vision of leveraging growth while safeguarding our country's renewable energy assets, irrespective of their original make."
"We admire Renom's intrinsic strengths as an ISP, and we compliment the Sanjay Ghodawat Group for building the same with such vision and commitment. Sanjayji Ghodawat has been a long-standing well-wisher of the Suzlon Group, and we look forward to a successful partnership with the SGG."
JP Chalasani, Chief Executive Officer, Suzlon Group, said, "At Suzlon, we have built our service business over decades with a single-minded focus, seeing it as a key enabler of energy transition. With our in-house Suzlon Services Business focussed on Suzlon-make turbines and now with Renom's focus on non-Suzlon Multi Brand Renewable Energy Assets, we are comprehensively positioned across the Indian Renewables OMS sector. We intend to support and strengthen Renom further as a standalone ISP to help provide best-in-class customer service to all multi-make customers in the wind energy O&M space."
Shares of Suzlon Energy Ltd climbed 5 per cent in Wednesday's trade after the foreign brokerage Morgan Stanley maintained its 'overweight' recommendation on the largest domestic renewable energy solutions provider, with a target price of Rs 73.40 per share. The price target was about 11 per cent higher than Suzlon Energy's Tuesday's closing price.
Suzlon signed executed definitive agreements for the acquisition of a 76 per cent stake in Renom Energy Services, in two tranches, from the Sanjay Ghodawat Group (SGG). Renom is the largest Multi Brand Operations and Maintenance service (MBOMS) provider in the country with assets of 1,782 MW in Wind, 148 MW in Solar, and 572 MW in BOP under maintenance across customer segments.
Following the developments, the stock climbed 4.81 per cent to hit a high of Rs 69.45 on BSE. Morgan Stanley reportedly said that the implied valuation of 4 times price-to-sales for the deal is cheaper than that of Suzlon Energy's listed peer. JM Financial has a target of Rs 71 on Suzlon Energy. Geojit Financial Services has a target of Rs 73 on Suzlon Energy. Anand Rathi Shares & Stock Brokers' target stands at Rs 68 and Nuvama Institutional Equities' at Rs 64.
Suzlon Energy said the first tranche of the Renom Energy deal would involve the acquisition of a 51 per cent stake for a consideration of Rs 400 crore. In the second tranche, Suzlon Energy would acquire an additional 25 per cent stake within 18 months from the acquisition of the first tranche for a consideration of Rs 260 crore.
"The closure of the transaction is subject to the completion of certain condition precedents. This strategic acquisition will help unlock Renom's core potential and position it from a place of strength to become a leading Independent Service Provider (ISP) and custodian of multi brand renewable energy assets," Suzlon Energy said.
Girish Tanti, Vice Chairman, Suzlon Group, said on the acquisition, "With India's target to achieve 500 GW of renewable energy installations by 2030, we shall see a multitude of different technologies and wind turbines of various makes in the market going ahead. Renom has emerged as a single largest player in this domain with great strength and potential to tap further into this market segment. This acquisition aligns with Suzlon Group's vision of leveraging growth while safeguarding our country's renewable energy assets, irrespective of their original make."
"We admire Renom's intrinsic strengths as an ISP, and we compliment the Sanjay Ghodawat Group for building the same with such vision and commitment. Sanjayji Ghodawat has been a long-standing well-wisher of the Suzlon Group, and we look forward to a successful partnership with the SGG."
JP Chalasani, Chief Executive Officer, Suzlon Group, said, "At Suzlon, we have built our service business over decades with a single-minded focus, seeing it as a key enabler of energy transition. With our in-house Suzlon Services Business focussed on Suzlon-make turbines and now with Renom's focus on non-Suzlon Multi Brand Renewable Energy Assets, we are comprehensively positioned across the Indian Renewables OMS sector. We intend to support and strengthen Renom further as a standalone ISP to help provide best-in-class customer service to all multi-make customers in the wind energy O&M space."