Brokerage firm Geojit Financial Services has revised its rating for Suzlon Energy, a leading company in the wind energy sector.
Suzlon Energy: Suzlon Energy, a prominent Indian wind energy company, is once again in the spotlight, but for a rather interesting reason. Geojit Financial Services has downgraded the company's rating from 'Buy' to 'Accumulate,' while simultaneously raising its target price from ₹71 to ₹77. This indicates a cautious approach to new investments, yet reflects the brokerage house's considerable optimism regarding the company's future prospects.
What does the rating change mean?
The brokerage's downgrade from 'Buy' to 'Accumulate' advises investors to maintain existing holdings rather than making new investments. This change is typically implemented when recent price appreciation increases risk, while the company's fundamentals remain b. Geojit's target price increase reflects Suzlon's operational strength and stable order book.
Strong order book provides support
Geojit believes Suzlon's 5.5-gigawatt order book offers clarity regarding the company's future. Approximately 80 percent of these orders originate from commercial, industrial, and public sector entities, indicating consistent demand across diverse sectors.
Crucially, orders for the company's flagship S144 wind turbine model constitute 92 percent of the total order book. This highlights Suzlon's maintenance of high quality and reliability in its product portfolio.
Surge in deliveries and revenue anticipated
Geojit projects a 41 percent increase in wind turbine deliveries between fiscal years 2025 and 2027. Furthermore, the company's revenue is expected to grow by 38 percent annually. Return on equity (ROE) is projected to reach 26 percent, a positive sign for investors.
March quarter results surprising
Suzlon Energy delivered a b performance in the March quarter of fiscal year 2025. Net profit reached ₹1,182.22 crore, compared to ₹254.12 crore in the same quarter of the previous year – a nearly fivefold increase, reflecting the company's operational efficiency and market demand.
The company also saw a significant surge in overall revenue. March 2025 quarter revenue stood at ₹3,773.54 crore, a 73 percent increase compared to ₹2,179.20 crore in March 2024.
Strong financial position
By the end of fiscal year 2025, Suzlon's balance sheet had further strengthened. The company holds ₹1,943 crore in net cash, and its consolidated net worth has reached ₹6,106 crore. This indicates the company's success in achieving debt-free status and maintaining positive cash flow.
Nuvama maintains hold rating
Another brokerage house, Nuvama Institutional Equities, has maintained its 'Hold' rating on Suzlon Energy. This suggests they advise investors to retain current investments but are not overly enthusiastic about new purchases.
What should investors do?
Considering the current circumstances, Suzlon Energy's fundamentals appear b. The company's performance, order book, delivery projections, and balance sheet all indicate positive trends. However, given the recent rally and price appreciation, investors should exercise caution with new investments.
The ratings from brokerage firms like Geojit and Nuvama suggest that the company may be a b long-term investment option, but short-term gains may require a more conservative approach.
