Suzlon Energy Stock Rises 5% Amid Positive Outlook and Strategic Acquisition

Suzlon Energy Ltd, a leading renewable energy solutions provider, saw its stock rise by 5% on Wednesday. This surge followed Morgan Stanley’s ‘overweight’ rating, with a target price of Rs 73.40 per share, which is approximately 11% higher than the closing price on Tuesday.

Analyst Targets

Several financial institutions have also set target prices for Suzlon Energy:

• JM Financial: Rs 71 per share

• Geojit Financial Services: Rs 73 per share

• Anand Rathi Shares & Stock Brokers: Rs 68 per share

• Nuvama Institutional Equities: Rs 64 per share

Acquisition of Renom Energy Services

Suzlon Energy recently executed definitive agreements to acquire a 76% stake in Renom Energy Services from the Sanjay Ghodawat Group. This acquisition is set to be completed in two tranches:

1. First Tranche: Acquisition of 51% stake for Rs 400 crore

2. Second Tranche: Acquisition of an additional 25% stake within 18 months for Rs 260 crore

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

Strategic Importance

The acquisition of Renom Energy Services is expected to bolster Suzlon Energy’s position in the renewable energy market. Girish Tanti, Vice Chairman of Suzlon Group, highlighted the strategic importance of this acquisition, stating that it aligns with India’s renewable energy goals and Suzlon’s vision of leveraging growth while protecting the country’s renewable energy assets.

Market Reaction

Following the announcement, Suzlon Energy’s stock climbed 4.81% to reach a high of Rs 69.45 on the Bombay Stock Exchange (BSE). Morgan Stanley noted that the valuation of four times the price-to-sales ratio for the deal is favorable compared to Suzlon’s listed peers.

Future Outlook

JP Chalasani, CEO of Suzlon Group, emphasized that Suzlon’s service business has been built over decades with a strong focus on facilitating energy transition. The Integration of Renom’s capabilities in managing multi-brand renewable energy assets is expected to enhance Suzlon’s service offerings and customer satisfaction.

Disclaimer: The information provided here is for informational purposes only and should not be taken as investment advice. Readers should consult with a qualified financial advisor before making any investment decisions.