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Business News/ Markets / Stock Markets/  Stocks to buy: Suzlon Energy, Inox Wind shares get a ‘buy’ call from Nuvama Equities; sees up to 30% upside
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Stocks to buy: Suzlon Energy, Inox Wind shares get a ‘buy’ call from Nuvama Equities; sees up to 30% upside

Stocks to buy: Suzlon Energy share price is up 10% in one month, while the stock has gained 20% year-to-date (YTD). Suzlon Energy shares have given multibagger returns of 324% in the past one year.

Stocks to buy: Inox Wind share price has risen over 11% YTD and has also given multibagger returns of more than 314% in one year. (Photo: Bloomberg News)Premium
Stocks to buy: Inox Wind share price has risen over 11% YTD and has also given multibagger returns of more than 314% in one year. (Photo: Bloomberg News)

Suzlon Energy and Inox Wind, the turnkey EPC players, are likely to benefit from the increasing wind energy demand in India and brewing supply crunch.

Brokerage firm Nuvama Institutional Equities has initiated its coverage with a ‘Buy’ rating on both, Suzlon Energy shares and Inox Wind shares as it believes wind turbine generator (WTG) manufacturers’ execution capacity to determine growth ahead.

The wind energy demand in India is on a revival and the country is looking to auction around 50 GW renewable energy (RE) annually for the next five years, and has even set targets for RE implementing agencies.

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FY24 data show wind TAM of 8–10 GW based on vanilla wind bids plus wind share of RTC/ FDRE/ Hybrid while C&I demand could be 4–6 GW over and above. With annual wind demand estimated at 12–14 GW, of which 5 GW is turnkey EPC demand versus supply of only 3GW, a supply crunch is brewing, and Nuvama Equities expects it to come to the fore soon.

Here’s why the brokerage is bullish on Suzlon Energy shares and Inox Wind shares:

Suzlon Energy | Buy | TP: 53

Wind energy leader in pole position Suzlon Energy is the market leader in WTG market with a 30% share and among the only two wind EPC suppliers in India. Its growth visibility is backed by industry tailwind of 12–14 GW TAM annually, technological edge, high-margin O&M services and balance sheet, Nuvama said.

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It argues that Suzlon Energy is capable of sustaining its lead in WTG/ turnkey EPC execution, translating to an order book and PAT CAGR of 21% and 61% over FY24 – 27E.

Nuvama Equities Initiates coverage with a ‘Buy’ call and Suzlon Energy share price target of 53 apiece, implying an upside potential of more than 20% from Tuesday’s closing price.

Inox Wind | Buy | TP: 193

Inox Wind is one of the only two WTG and turnkey EPC companies in India, wherein annual wind demand is reviving to more than 12 GW. With strong industry tailwinds in place, a deleveraged balance sheet and a robust order book, Nuvama Equities anticipates a strong pickup in Inox Wind’s performance, going forward.

Reviving macros in a duopolistic wind EPC market shall enable it to achieve order book and revenue CAGR of 44% and 73% (FY24–27E) led by D/E reduction to 0.6x, 2.5GW WTG/ 1.3GW EPC capacity; and 30%-plus O&M services’ EBITDA margin, Nuvama Equities said.

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The brokerage initiates its coverage with a ‘Buy’ rating and Inox Wind share price target of 193 apiece, implying an upside of over 30% from Tuesday’s closing price.

Suzlon Energy share price is up 10% in one month, while the stock has gained 20% year-to-date (YTD). Suzlon Energy shares have given multibagger returns of 324% in the past one year.

On the other hand, Inox Wind share price has risen over 11% YTD and has also given multibagger returns of more than 314% in one year.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 29 May 2024, 11:01 AM IST
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