Suzlon Energy, a leading renewable energy solutions provider, experienced a significant drop of around 5 percent in its stock price ahead of an investor meet organized by JM Financial Institutional Securities. The meeting aimed to discuss the company’s financial performance for the second quarter and half-year ended September 30, without sharing any unpublished price-sensitive information.
Despite the initial dip, Suzlon Energy has been witnessing an impressive rally throughout the year, with the stock surging 267 percent. This substantial growth has outpaced the Nifty’s 8 percent rise over the same period.
Recently, JM Financial initiated coverage on the Suzlon Energy stock with a “buy” recommendation. Following the release of the company’s Q2 FY24 results, the brokerage projected a considerable revenue growth of 38 percent and a 43 percent growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) over the FY23-26 period. Additionally, with a positive outlook on Suzlon Energy’s order inflow, execution visibility, and product portfolio, JM Financial revised its estimates for FY25E/26E upwards. These factors have contributed to the brokerage’s maintained “buy” rating and revised target price of Rs 37 per share.
Moreover, the stock’s recent surge can be attributed to the anticipation of Suzlon Energy’s potential inclusion in AMFI’s midcap category during the January reshuffle, as well as its newly acquired position in the MSCI Global Standard Index.
With a strong financial performance in the quarter ended September 2023, Suzlon Energy witnessed a 45 percent year-on-year increase in net profits, reaching Rs 102 crore. Although the revenue experienced a marginal decline to Rs 1,417 crore, Suzlon Energy successfully reduced its debt to negligible levels, resulting in a net cash position on its balance sheet and triggering a substantial rally in the stock.
Frequently Asked Questions (FAQ)
1. What was the reason for Suzlon Energy’s drop in stock price?
The drop in Suzlon Energy’s stock price was a result of a 5 percent dip before an investor meet organized by JM Financial Institutional Securities.
2. What were the projections made by JM Financial for Suzlon Energy?
JM Financial projected a revenue growth of 38 percent and an EBITDA growth of 43 percent over the FY23-26 period for Suzlon Energy.
3. What contributed to the recent surge in Suzlon Energy’s stock?
The anticipation of inclusion in AMFI’s midcap category and the company’s addition to the MSCI Global Standard Index contributed to the sharp rally of Suzlon Energy’s stock.
4. How did Suzlon Energy perform in the quarter ended September 2023?
In that quarter, Suzlon Energy achieved a 45 percent year-on-year increase in net profits, reaching Rs 102 crore, while experiencing a marginal decline in revenue to Rs 1,417 crore.
5. Has Suzlon Energy successfully reduced its debt?
Yes, Suzlon Energy has effectively reduced its debt to negligible levels, resulting in a net cash position on its balance sheet.
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