Suzlon Energy stock hits 5% upper circuit after Morgan Stanley forecasts earnings boost from NTPC order

Shares of Suzlon Energy, India's largest renewable energy solutions provider, hit the 5 percent upper circuit limit today, reaching ₹78.05 per share. This increase comes after global brokerage firm Morgan Stanley reaffirmed its 'Overweight' rating on Suzlon Energy following the company's recent acquisition of a 1.17 GW order from NTPC. 

Morgan Stanley has set a target price of ₹73 for the stock, noting that this new contract enhances earnings visibility for FY26-27. On Monday, Suzlon Energy secured India's largest wind energy order from NTPC Green Energy Limited, a subsidiary of NTPC Limited. 

In its filing on Monday, Suzlon Energy detailed that it will install a total of 370 wind turbine generators (WTGs) of model S144, featuring a hybrid lattice tubular (HLT) tower, each with a rated capacity of 3.15 MW. These turbines will serve two projects for NTPC Renewable Energy and one for Indian Oil NTPC Green Energy Pvt Ltd in Gujarat.

This win takes Suzlon’s largest-ever cumulative order book close to 5 GW as of September 3, 2024.

Suzlon offers a diverse range of products from 2.1 MW to 3.15 MW, with varying rotor diameters and tower heights tailored to diverse wind regimes and solutions designed for integrating various renewable energy sources.

The S144 wind turbine generator is one of the largest in India, extendable up to 3.15 MW, depending on site wind conditions, available at a hub height of 140 meters going up to 160 meters by its serial launch.

At 160 metres hub height, the S144 is also India's tallest wind turbine. Suzlon's S144 fleet delivers 40 percent to 43 percent higher generation than Suzlon’s previous models, showcasing its ability to optimise wind resources at higher altitudes and make low-wind sites viable, according to the company's latest annual report. 

In FY24, the company introduced its new wind turbine generator (WTG) model, S144. As of June 30, 2024, it boasted a net cash surplus of ₹1,197 crores, positioning it well for timely capital expenditures, particularly for blade moulds. The company plans to ramp up its capital expenditure in the future to harness market potential and invest in technology and process improvements.

India's wind energy outlook

India's onshore wind market is poised to grow after a long hiatus. Hybrid RE projects of wind and solar instead of either wind or solar are a reality. The industry has seen the transition from hybrid to round-the-clock (RTC) and has moved to fixed and dispatchable renewable energy (FDRE) tenders, solidifying wind's position in India’s energy transition. The market is expected to reach 4.8 GW in 2025, driven by the expiry of the interstate transmission system (ISTS) in June 2025.

As of March 31, 2024, India’s total installed wind capacity is 45,866 MW, up 8 percent from the previous year. In FY24, the highest new wind capacity was added in Gujarat (1744 MW), followed by Karnataka (725 MW), Tamil Nadu (586 MW), and Maharashtra (195 MW).

Currently, Gujarat has the highest total installed wind capacity of 11.72 GW, closely followed by Tamil Nadu (10.60 GW), Karnataka (6.02 GW), Maharashtra (5.20 GW), Rajasthan (5.19 GW), Andhra Pradesh (4.09 GW), and Madhya Pradesh (2.84 GW), according to Suzlon's FY annual report.

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