Suzlon Energy share price jumps nearly 4% after Q2 net profit improves 96% YoY

Shares of Suzlon Energy, India’s largest renewable energy solutions provider, jumped nearly 4% to ₹73.50 apiece on Tuesday, October 29, as investors responded positively to the company’s September quarter results (Q2FY25).

The company released its Q2FY25 results on Monday, posting a healthy performance, though it came in slightly below analysts' expectations due to the impact of heavy monsoon. 

It ramped up execution to 274 MW in Q2 FY25, compared to 132 MW in Q2 FY24, resulting in net revenue of ₹2,093 crore, a 48% year-over-year improvement. Net profit stood at ₹201 crore, reflecting a 96% year-over-year increase but a 34% quarter-over-quarter decrease.

EBITDA margin was lower at 14.1%, down from 15.9%, impacted by elevated ESOP costs. During the quarter, the company signed India’s largest wind energy order of 1,166 MW with NTPC Green Energy Limited, the renewables arm of NTPC, to install a total of 370 wind turbine generators (WTGs) featuring the S144 model, each equipped with a hybrid lattice tubular (HLT) tower and a rated capacity of 3.15 MW.

This agreement includes two projects for NTPC Renewable Energy Limited (a wholly owned subsidiary of NGEL) and one project for Indian Oil NTPC Green Energy Pvt. Ltd. (a group company of NGEL) in the state of Gujarat.

As of the September quarter-end, the company’s S144 wind turbine has secured a robust order book of 4.7 GW, and the company is ramping up capacity to boost manufacturing for this product. A robust order inflow of 1.6 GW during the reporting quarter has led to a record-high order book of 5.1 GW, providing strong revenue visibility.

During the quarter, the company executed definitive agreements to acquire a 76% stake in Renom Energy Services Private Limited (“Renom”) from the Sanjay Ghodawat Group (SGG), structured in two tranches.

Renom is the largest Multi-Brand Operations and Maintenance Service (MBOMS) provider in India, managing assets across various customer segments, including 1,782 MW in wind, 148 MW in solar, and 572 MW in balance-of-plant (BOP) services.

Following the company's Q2 numbers, domestic brokerage firm Nuvama Institutional Equities retained its 'hold' rating on the stock with a target price of ₹67 apiece. “While we stay long-term positive on SUEL, the stock price is already factoring in the uptick in OI/profits at 45x FY27E EPS of WTG business,” the brokerage said. 

The Indian government’s aim to reach 50% renewables in the energy mix by 2030 is expected to be driven primarily by wind and solar. Projections indicate that wind installed capacity will jump to 100 GW from the current 47 GW, while solar installed capacity is set to rise to 293 GW by 2030 from 91 GW as of September 2024.

Suzlon's Share price history

The company's shares have shown robust momentum in the market, reaching new multi-month highs. Since March 2023, the stock has followed a strong upward trend, with an impressive gain of 800% to date.

During this period, the stock has moved up from ₹7.90 apiece to the current trading level of ₹71. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.