Suzlon Energy stock up 4% after Morgan Stanley’s ‘Overweight’ rating

On December 10, Suzlon Energy’s shares experienced a notable increase of over 4%, trading at ₹77.68 on the National Stock Exchange (NSE). This uptick came after Morgan Stanley maintained an 'Overweight' rating on the stock, setting a target price of ₹73. The boost was largely attributed to Suzlon’s recent significant achievement of securing a major 1.17 GW wind energy order from NTPC Green Energy Limited.

Suzlon Energy’s significant order win

Suzlon Energy's latest contract represents a major milestone for the company, marking its return to bidding for Public Sector Undertaking (PSU) orders after a considerable hiatus. The substantial order from NTPC Green Energy Limited, a subsidiary of NTPC, includes the provision of wind turbines, as well as the execution and commissioning of wind energy projects in Gujarat. This order is the largest wind energy contract ever awarded in India, reflecting Suzlon's enhanced market position.

The contract involves Suzlon supplying 370 wind turbine generators (WTGs) of the S144 model, each with a rated capacity of 3.15 MW. These turbines will be deployed across two NTPC Renewable Energy Limited projects and one project for Indian Oil NTPC Green Energy Pvt. Ltd. 

Impact of the order on Suzlon’s stock performance

The news of this substantial order has had a positive impact on Suzlon Energy’s stock, reflecting a strong response from investors. The stock has surged nearly 99% this year alone, significantly enhancing the returns for those investing in the stock market. Over the past 12 months, Suzlon’s share price has skyrocketed by 220%, compared to a 28% increase in the Nifty index during the same period. This performance highlights the company's impressive recovery and growth trajectory.

The 'overweight' rating of Morgan Stanley and its target price of ₹73 suggest further potential for Suzlon Energy, reinforcing the stock’s attractiveness for those considering investing in the stock market. The brokerage's endorsement is based on the belief that the new order will improve Suzlon's earnings visibility for FY26-27, given that the company was previously ineligible to bid due to its negative net worth.

A comeback to the PSU sector

The recent order from NTPC Green Energy Limited marks Suzlon’s first direct wind energy order from a PSU in years. Girish Tanti, Vice Chairman of Suzlon Group, described the contract as a significant achievement, signalling Suzlon’s successful re-entry into the PSU customer segment. JP Chalasani, the group CEO, expressed optimism about this order being the first of many future collaborations between Suzlon and NTPC, further enhancing the company's prospects in the wind energy sector.

Key takeaways

• Stock rise: Suzlon Energy's shares increased by over 4% to ₹77.68 following Morgan Stanley's 'Overweight' rating.
• Major contract: The company secured a 1.17 GW wind energy order from NTPC Green Energy Limited, its largest order ever.
• Stock performance: Suzlon’s stock has surged 99% this year and 220% in the past 12 months, showcasing significant growth and profitability.
• Return to PSU sector: The contract represents Suzlon's successful re-entry into the PSU market, with expectations of further orders in the future.