Suzlon Energy, Inox Wind Q4 results soon. Anand Rathi shares earnings estimates

Anand Rathi in its Q4 results preview note said it expects strong Wind Turbine deliveries in the March quarter, as the domestic broking firm factored in 313 MW for Suzlon Energy Ltd and 130 MW for Inox Wind. This would translate to sharp growth in earnings, it said. The domestic brokerage said order books of over  5.6GW at the end of third quarter provide strong earnings assurance for FY25 and FY26.

To recall, Anand Rathi recently initiated coverage on Suzlon Energy and Inox Wind with 'Buy' ratings, thanks to renewed focus on the wind-energy sector amid ambitious growth plans by the government.

"After a long lull since FY17, order books of Suzlon Energy and Inox Wind have jumped, which provide earnings assurance, the brokerage said adding that the competitive intensity for the sector has come down as players have exited the space, leaving only two to capture the market," the brokerage had said in a March note.

For the March quarter, Anand Rathi expects Suzlon Energy to report an adjusted profit of Rs 262.20 crore, up 283 per cent. Sales are seen rising 52.4 per cent YoY to Rs 2,581.70 crore. Ebitda margin is seen at 12.6 per cent against 15.9 per cent in December and 13.7 per cent in the same quarter last year.

In the case of Inox Wind, profit is seen at Rs 80.30 crore. Anand Rathi sees sales at Rs 1,087.70 crore, up 464.20 per cent. Among the two, Suzlon Energy is Anand Rathi's top pick in the wind energy sector.    

Anand Rathi has a target of Rs 49 on Suzlon Energy. With a 32 per cent market share in India’s wind turbines, Suzlon Energy turned net-cash in 9MFY24 for the first time since FY06. It has battled high debt from incessant acquisitions, the 2008 global financial crisis and anaemic domestic markets due to policy changes, which crimped its prospects.

Anand Rathi suggested a target price of Rs 590 on Inox Wind. "Fully integrated in wind energy, Inox Wind is set to benefit from the upturn in the sector, Anand Rathi said. After a turbulent FY18-23, promoters’ fund infusion has cut interest-bearing debt to Rs 500 crore in Q3FY24. Ahead, aided by a strong, 2,600MW order book, Anand Rathi expects 450MW/700MW/1,000MW delivery in FY24/25/26. The landbank may support 5GW of capacity, which would ensure faster turnaround of turnkey projects (1.8GW out of 2.6GW)," it said.

On Friday, Suzlon Energy shares were trading 0.50 per cent lower at Rs 42.01. Inox Wind shares rose 1.35 per cent to Rs 548.35.