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Suzlon Energy shares are likely to see an upside of 38% by September 2024, according to a report by JM Financial. The brokerage firm has assigned a target price of Rs. 22 per share on the stock, citing strong industry tailwinds and the company’s focus on reducing debt.
The wind energy sector is expected to grow at a CAGR of 15% over the next five years, driven by government initiatives such as the National Solar Mission and the Production-Linked Incentive (PLI) scheme. Suzlon is well-positioned to capitalize on this growth, as it is one of the leading wind turbine manufacturers in India.
The company has also been focusing on reducing its debt. In the last two years, Suzlon has reduced its debt by over Rs. 10,000 crore. This has improved the company’s financial health and made it more attractive to investors.
JM Financial said that Suzlon’s shares are currently trading at a discount of 40% to its peers. The brokerage firm believes that the stock is undervalued and has the potential to re-rate.
The report said that Suzlon’s order book stands at Rs. 16,000 crore, which is expected to give the company a strong revenue visibility for the next two years. The company is also expected to benefit from the PLI scheme, which will provide financial support to domestic manufacturers of wind turbines.
Overall, JM Financial is positive on Suzlon Energy shares and believes that the stock has the potential to deliver strong returns in the coming years.
Here are some of the key factors that could support the upside in Suzlon Energy shares:
- Strong growth in the wind energy sector
- Reduction in debt
- Healthy order book
- Benefits from the PLI scheme
However, there are also some risks to consider, such as:
- Competition from Chinese players
- Delays in project execution
- Fluctuations in raw material prices
Overall, Suzlon Energy shares are a good investment for investors who are looking for exposure to the growing wind energy sector. The stock is currently undervalued and has the potential to deliver strong returns in the coming years.
