Suzlon Energy shares climb 5% for 2nd day; 6-month return now at 305%

Shares of Suzlon Energy Ltd hit its 5 per cent upper circuit limit in Friday's trade, in addition to a similar move in the previous session, taking its one-month gains to 29 per cent. At 9.40 am, the Suzlon Energy stock had buy orders of 25,67,700 shares against sell orders of 11,894 shares. The stock climbed 4.98 per cent to Rs 41.13 on BSE. With this, the scrip is up 305 per cent in the last six months.

The recent rally in the stock is seen amid optimism over improved financials, with the company recently suggesting that its focus would stay on high value quality orders, thus, better margins. Suzlon Energy, analysts noted, expects annual addition of 3-4GW in FY24E and 5-6GW in FY25E in the country.

Suzlon Energy's order book stands at 1.6 GW at the September quarter-end and analysts noted that 62 per cent of this orderbook comprised of 3.x MW turbines. The supply of these turbines would begin from the March quarter of 2024, JM Financial said following the Day 1 of JM Financial India Conference 2023.

JM Financial suggested that the Suzlon Energy's management was focusing on non-EPC orders and operations and maintenance services (O&M) contracts and that the share of orders from the Commercial & Industrial (C&I) segment has jumped to 64 per cent in the September quarter from 55 per cent in the June quarter following higher activity in the C&I segment.

Anlaysts noted that Suzlon had, in the past, went for restructuring exercise due to un-fulfilment of its debt obligations but it refinanced its existing debt and converted its entire outstanding optionally convertible debentures (OCDs) and compulsorily convertible preference shares (CCPS). It came out with Rs 1,200 crore rights and completed a Rs 2,000 crore qualified institutional placement in August. This helped it lower debt and interest cost.

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