Suzlon Energy shares rise 5% after strong Q3 earnings and broker upgrades.

Suzlon Energy Shares Hit Upper Circuit for Second Session: Is the Upside Capped?

Shares of Suzlon Energy Ltd have surged for the second consecutive session, hitting the upper circuit after the company reported better-than-expected Q3 earnings for the financial year 2024-25 (Q3 FY25). The rally in Suzlon Energy shares comes in the wake of two major global brokerages expressing optimism about the company’s prospects.

Stock Performance and Trading Activity

In today’s session, Suzlon Energy shares rose by 5%, touching ₹55.39, compared to the previous day’s close of ₹52.76. The stock has clocked a turnover of ₹1.20 crore as 2.17 lakh shares changed hands on the BSE.

With this uptick, Suzlon Energy’s market capitalization climbed to ₹75,593 crore, and the stock has already gained 26% in the past year and a remarkable 518% in the past two years. This stunning performance has caught the attention of investors, but the big question now is whether the upside is capped at these levels or if Suzlon Energy shares have more room to grow.

Positive Broker Reports Fueling the Rally

The recent rally has been supported by positive research notes from two global brokerages. Morgan Stanley maintained an ‘overweight’ stance on the stock, setting a price target of ₹71 per share. The brokerage highlighted the company’s 5.5 GW order book and its plans for fresh capital expenditure (capex) of ₹350-400 crore in manufacturing new blade production lines in Madhya Pradesh and Rajasthan. Morgan Stanley believes that the wind industry’s constraints, particularly around land acquisition, will improve from FY26, which bodes well for Suzlon’s future growth.

Meanwhile, Nuvama Institutional Equities also upgraded Suzlon Energy to ‘Buy’ from ‘Hold’, citing improved execution in Q3. The firm was particularly impressed by 447 MW of wind turbine capacity executed during the quarter, which exceeded their expectations. Nuvama raised its target price to ₹60, up from a previous estimate, citing valuation comfort after a recent stock correction.

Strong Q3 Earnings Boost Investor Sentiment

Suzlon Energy shares have rallied after the company reported Q3 FY25 results that exceeded expectations. The company reported a 91% YoY rise in consolidated net profit, which stood at ₹388 crore, up from ₹203 crore in the same period last year. This solid performance was driven by a 91% jump in revenue, which reached ₹2,969 crore compared to ₹1,553 crore in Q3 FY24.

Additionally, Suzlon Energy achieved record quarterly deliveries of 447 MW, further cementing its position as a leader in the wind turbine manufacturing industry. The company’s EBITDA for the quarter was ₹500 crore, showcasing strong operational performance.

Is the Upside Capped?

While the recent gains in Suzlon Energy shares are impressive, some analysts suggest that the stock might face challenges in sustaining this momentum over the short term. The strong Q3 earnings, positive broker reports, and upcoming large orders are undoubtedly encouraging factors. However, investors should keep in mind that Suzlon Energy’s shares have already rallied significantly—up 518% over the past two years—and may face resistance as it approaches higher valuations.

Key risks include regulatory challenges in the wind industry, the long timeline for land acquisition and execution of projects, and global economic conditions that might impact demand for renewable energy projects. These factors could limit short-term upside potential, especially if Suzlon Energy shares continue to trade at relatively high multiples.

Long-Term Outlook

In the longer term, the company’s strategy to expand its manufacturing capacity and the projected growth in wind energy generation presents solid potential for continued growth. The 5.5 GW order book and the expected improvements in land acquisition could drive future revenue streams, making Suzlon Energy shares an attractive play for investors with a longer-term view.

Conclusion

The recent surge in Suzlon Energy shares is a clear indication of strong market confidence, driven by impressive earnings, positive analyst upgrades, and the company’s strategic plans for growth. While the upside may be capped in the short term due to the stock’s already strong performance, the long-term growth prospects in the renewable energy sector and Suzlon’s leadership in wind turbine manufacturing make it a stock worth watching closely.

As always, investors should assess the balance of risk and reward before entering a position, considering both the recent gains and the potential challenges ahead.

read more about stock news niftynews

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top