Suzlon Energy shares reached a significant milestone today, hitting a 14-year high. This came after the company reported impressive results for the June quarter, released on Monday after market hours.
In the June quarter, Suzlon delivered its highest number of wind turbines in seven years, totaling 274 MW, which is a 103% increase from last year. The company’s revenue from operations rose to ₹2,016 crore, a 50% increase year-over-year. The quarterly EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached ₹370 crore, also the highest in seven years.
The net profit saw a remarkable 200% increase, reaching ₹302 crore. Suzlon’s net cash position was ₹1,197 crore as of June 30, 2024.
Suzlon’s order book at the end of the June quarter reached a record 3.8 GW, the highest in its history. Gross debt was significantly reduced to ₹101 crore in Q1 FY25, down from ₹6,391 crore in FY22, according to the company’s earnings presentation.
Following this stellar performance, Suzlon Energy’s stock hit the 5% upper circuit limit in today’s trading session, reaching a 14-year high of ₹58 per share.
Wealth Creator
After a long decline from 2008 to 2019, Suzlon shares made a strong comeback in 2020, rising 246%. This positive trend continued with gains of 60% in 2021, 13% in 2022, and 260% last year. So far this year, the shares have risen by 51%.
This increase in share value is due to the company’s consistent order wins, focus on reducing debt, and efficient management of working capital.
In June, several brokerage firms showed optimism about Suzlon’s growth prospects. ICICI Securities set a target price of ₹60 per share and maintained a ‘buy’ rating.
Favorable Market Conditions for India’s Wind Industry
India’s power demand is projected to rise substantially, with renewable energy sources expected to meet much of this growing demand. The Indian government aims to generate 1,900 billion units (BU) of electricity in the fiscal year 2024–25, a 9.3% increase from the previous year.
India, the world’s third-largest energy consumer and fourth-largest producer of renewable power, has made significant strides in the energy sector. The country ranks fourth in wind power and fifth in solar power, with a total installed power generation capacity of 442 gigawatts (GW) as of March 31, 2024.
Of this capacity, 199 GW comes from non-fossil fuel sources, making up 45% of the total. In the fiscal year 2023–24, renewable energy contributed about 71% to the nation’s power capacity additions.
India’s peak power demand has grown at an annual rate of over 5% over the past decade and is expected to keep rising as efforts to electrify even the most remote villages continue. The country is anticipated to see the highest increase in global energy demand growth until 2030, driven by expanding economic activity and increased digitalization across all sectors.
The goal of achieving 500 GW of non-fossil fuel capacity by 2030 has gained urgency. To meet this target, the government plans to tender 50 GW of renewable energy projects annually through FY 2027–28.
This growth will mainly be driven by the wind and solar energy sectors. Wind energy currently contributes 10% (43 GW) of the total installed capacity of 442 GW and is projected to grow to 13% (100 GW) by 2030.
Similarly, solar energy, which currently makes up 19% (82 GW) of the total capacity, is expected to grow to 38% (293 GW) by 2030, significantly increasing its share of the overall power capacity.
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