Motilal Oswal Gives Suzlon Energy a BUY Rating with a ₹70 Target Price; 21% Upside Potential. Stock delivered 677% return in two years. Brokerage cites attractive valuation and projected EPS CAGR of 63%.
Stock to buy: The Indian stock market continues its positive run for a seventh consecutive day. On Tuesday, the Sensex surged over 400 points, while the Nifty crossed 23,750. After significant selling by Foreign Institutional Investors (FIIs), buying appears to be returning to the market, leading to an improvement in market indices.
Suzlon Energy in Brokerage House Focus
Amidst recent recovery following a downturn, brokerage firm Motilal Oswal initiated coverage on the energy stock Suzlon Energy Limited with a 'BUY' rating. The brokerage house set a target price of ₹70 for the stock, indicating a potential upside growth of 21%.
Current Status of Suzlon Energy Shares
Suzlon Energy closed at ₹57.92 on Monday, and on Tuesday, it traded at ₹58.79, up by 1.50%. The stock had been under pressure recently, falling 33% from its high. However, it has recovered 7.79% in the last month.
Time Period Performance (%)
3 Months -9.29%
6 Months -29.11%
1 Year +57.43%
2 Years +677.78%
The stock's 52-week high is ₹86.04, and its low is ₹36.80. The company's total market capitalization on the BSE is ₹80,143.33 crore.
Why did the Brokerage House Give Suzlon Energy a 'BUY' Rating?
The brokerage firm believes that Suzlon Energy's valuation has now reached a reasonable level. The company's projected EPS CAGR is expected to be 63% during FY2024-27, significantly higher than other domestic companies like ABB India (23%), Siemens (20%), Thermax (17%), and CG Power (26%).
According to Motilal Oswal, the target price of ₹70 was determined by applying a target P/E ratio of 34x to the projected EPS for December 2026. This is slightly higher than the historical average 2-year forward P/E of 27x.
Is Suzlon Energy a Right Investment Option?
The brokerage firm noted that while valuations in the capital goods sector have moderated, they remain at elevated levels. Based on the PEG ratio, Suzlon is trading at a FY26E PEG ratio of 0.6x, significantly lower than other domestic companies like Thermax (2.5x), ABB India (6x), and CG Power (1.9x).
(Disclaimer: This news is for informational purposes only. It does not constitute any investment advice. Consult your financial advisor before making any investment decisions.)
