Suzlon share price: Multibagger returns ahead? Kranthi Bathini shares his expectation

Kranthi Bathini, Director (Equity Strategy) at WealthMills Securities, on Thursday said Suzlon Energy Ltd shares can be bought on dips, adding that the scrip can deliver a mid-teen returns going ahead. On a query from a viewer, Bhaskar from Hyderabad, who held 840 Suzlon shares at an average purchase price of Rs 58, Bathini said in an exclusive interview with BTTV that instead of focusing on the recent rally, investors should look at the stock's IPO price to get a 360-degree perspective on Suzlon's journey.

On Thursday, the stock was trading at Rs 57.59 apiece, down 0.80 per cent. The scrip has delivered 612.75 per cen return in the past five years but is off 86 per cent from its January 2008 highs of Rs 422.26 apiece. The stock hit an all-time low of Rs 1.51 on March 26, 2020, before staging a recovery, data compiled from corporate database AceEquity suggests.

Bathini said those investors who bought the Suzlon stock at low levels got rewarded. Eventually, he believes everything gets boiled down to earnings of the company, adding that Suzlon had a good March quarter but the debt level is one of the key things to watch. He said the rising importance of the alternative energy offers some positivity to Suzlon Energy.

Bathini said if the investor has a medium to long-term view, he can hold on to the stock and felt the stock can still deliver after the recent rise. 

"Whether this stock can become a multibagger again is difficult to answer because most people perceive that it has rallied from Rs 5 to Rs 50 and then reached the Rs 68 range. Whether the same kind of performance can be repeated is difficult to say," Bathini said.

Bathini said Suzlon Energy shares can deliver a mid-teen kind of returns.

"One can buy the stock at dips because the sector is turning positive at this point in time. Wait for the next quarterly results and the management commentary that is going to drive the stock from here onwards," Bathini said.

A couple of brokerages recently turned positive on Suzlon Energy. They said the company is positioning itself for the next phase of India's renewable energy expansion, with plans to evolve from a wind turbine manufacturer into a broader clean-energy solutions provider.

Nuvama maintained its 'Hold' rating on Suzlon. The brokerage slightly raised its target price to Rs 56 from Rs 55, citing expectations that much of the company's projected growth will materialise in later years. It estimates FY31 earnings per share of about Rs 3.7 and a profit-before-tax compound annual growth rate of around 23 per cent.