Why Suzlon Energy Share Price is Rising

They say "where there's a will, there's a way," and Suzlon Energy has become the poster child for that saying in the Indian stock market.

Knocked down by the 2008 financial crisis and a mountain of debt, only a few believed that the wind energy company could ever climb back up. But it did make the climb, and in spectacular fashion.

The company's operations have gotten a second wind, and so has its stock price. In the recent years Suzlon Energy share price reached new heights leaving investors in awe.

Today, it stands tall as a top Indian wind energy stock, with a mind-blowing 387% return in just the past year.

2024 is proving to be another banner year, with the share price already up over 19.7% and a 14% jump in the last five days alone.

So what is driving the recent surge in Suzlon Energy share price?

Read on to know...

#1 Big Order Win

The renewable energy solutions company, announced yesterday that it had securing new orders for wind energy projects totalling 402 MW from Juniper Green Energy. The projects will be located at a site in Fatehgarh, Rajasthan.

Suzlon will install a total of 134 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower design. Each WTG will have a rated capacity of 3 MW.

The agreement encompasses the supply of wind turbines, project execution including foundation, erection, and commissioning, as well as comprehensive operations and maintenance services following commissioning.

Projects of this scale have the potential to provide electricity to approximately 331,000 households and reduce CO2 emissions by an estimated 1.3 million (m) tonnes annually.

This is the largest order that the company has received in 2024.

Apart from this the company received four more orders in 2024. Take a look at the table below.

Suzlon Energy Order Win (2024)

Sr No	Date of winning the order	Client name	Order Size	Nature of order
1	5/1/2024	Evernew Energy	225 MW	To supply 75 wind turbines with a rated capacity of 3 MW each
2	30-01-2024	Evren	642 MW	To supply 214 wind turbines with a rated capacity of 3 MW each
3	29-02-2024	EDF Renewables	30 MW	To supply 10 wind turbines with a rated capacity of 3 MW each
4	7/3/2024	Juniper Green Enerygy	72.5 MW	To supply 23 wind turbines with a rated capacity of 3.15 MW each
5	22-05-2024	Juniper Green Enerygy	402 MW	To supply 134 wind turbines with a rated capacity of 3 MW each

Source: Suzlon Energy's BSE Filings

#2 Rising Power Demand

A sizzling summer and a surge in power demand are creating a perfect storm for India's power grid.

The heatwave gripping the country has driven up power consumption in both homes and industries, with air conditioners and desert coolers battling the scorching temperatures and pushing consumption to record highs.

April saw a sharp 11% increase in power consumption compared to last year, and May is on track to meet projections of 235 GW.

Peak power demand i.e. the highest point during the day, recently hit a record 233 GW, surpassing the previous year's mark.

The heatwave isn't the only factor. The growing popularity of electric vehicles (EVs) is adding another layer of demand to the grid.

To meet these rising needs, India is increasingly turning to renewable energy sources, particularly solar.

This presents exciting opportunities for clean energy companies like Suzlon Energy to expand their reach and capitalize on the growing demand for sustainable power solutions.

The company will also declare its financial statement for FY24 on 24 May 2024. The promise of strong financial numbers is also driving the rally.

What Next?

India is the fourth largest wind market. No wonder, it has set a series of ambitious clean energy targets for 2030. Take a look at the chart below.

India's Green Energy Targets for 2030

To achieve these goals, the Ministry of New and Renewable Energy (MNRE) has established a specific target of installing 100 GW of wind energy capacity by 2030.

As a leading player in the Indian wind power sector, Suzlon already has a well-established network and experience for project execution.

Ambitious government targets promise a huge order inflow for the company.

Furthermore, Suzlon is actively working to reduce its debt burden, inching closer to a debt-free future.

Overall, the outlook for Suzlon Energy appears promising. Tailwinds in the renewable energy sector coupled with Suzlon Energy's focus on operational efficiency, financial sustainability, and market presence positions the company well for future growth.

However, managing competition, adapting to policy changes, and securing funding remain key challenges to navigate.

For a detailed analysis of Suzlon, we recommend you to watch the below video where Co-head of Research at Equitymaster Rahul Shah analyses the company.

How Suzlon Energy Shares has Performed Recently

In the past six months, shares of the company have rallied over 20% and it in past year it gave multibagger returns of 398%.

On a year-to-date basis, Suzlon Energy has surged over 22%, while in the past month, shares are up 13%.

The company touched its 52-week high of Rs 50.7 on 2 May 2024 and its 52-week low of Rs 9.5 on 26 May 2023.

About Suzlon Energy

Suzlon is a renewable energy solutions provider.

The company is involved in the business of manufacturing, project execution and operation and maintenance of wind turbine generators and sale of related components.

The company's client portfolio includes power utilities and electricity producers in both the private and public sectors.

To know more, check out Suzlon's financial factsheet and quarterly results.

You can compare Suzlon Energy with its peers:

Suzlon Energy vs Siemens

Suzlon Energy vs Inox Wind

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...