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Four Reasons for Penny Stock Suzlon Energy’s Stunning Growth

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The recently popular renewable power company Suzlon Energy, based in Pune, India, has seen an exponential increase in its share price, crossing the INR 30 mark for the first time since April 2015.

In the last year, the stock has grown by 315%, resulting in a market capitalization of over ₹42,000 crore. Impressive, right? The question is, what led the stock to climb the ladder? And what does the future have in store for this stock?

Here’s a glimpse of how Suzlon Energy has been performing

Suzlon Energy’s share price was just ₹7.45 a year ago. Today, it has skyrocketed to ₹30, marking its highest level in nearly seven years. 

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Source: Yahoo Finance

The stock has been on an upward trajectory since April, consistently delivering positive returns, with May and June standing out with impressive gains of 41.6% and 30%, respectively.

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Source: Yahoo Finance

Let’s explore the factors driving Suzlon Energy’s recent success.

#1. The growing renewable energy sector

Of late, renewable energy stocks, including Suzlon Energy, have gained popularity among investors due to strong order wins and growing demand driven by government initiatives promoting clean energy.

India is committed to achieving ambitious renewable energy targets, including 500 GW of non-fossil fuel capacity by 2030 and 100 GW of wind energy installations. These goals provide a conducive environment for companies like Suzlon Energy, a growing player in the renewable energy sector.

#2. Business acquisition

Another factor contributing to Suzlon Energy’s stock price growth is the successful acquisition of multiple wind power projects and improved financial performance. This includes a 29.4 MW wind project for BrightNight and a 201.6 MW order from O2 Power Private Limited.

The company’s order book has grown substantially, providing revenue visibility for the next two years. Additionally, the company has also garnered support from brokerage firms, thanks to its strong order book and financial turnaround.

#3. When the debt is low, profits are higher

Suzlon Energy adopted a debt reduction strategy, replacing multiple lenders with two new ones and converting debt instruments. This move, combined with a recent qualified institutional placement (QIP), has led the company to become debt-free, further boosting investor confidence.

#4. Market outlook

Financial and business analysts expect substantial revenue growth and improved margins in the coming years, projecting a soar profit after tax for FY24 and FY25. JM Financial also highlights the company’s favorable positioning in the wind sector, benefiting from debt reduction and enhanced financial stability.

As the company works toward becoming debt-free and continues to secure new projects, its growth prospects appear favorable. Investors are taking notice of Suzlon Energy’s growth in the renewable energy market, making it a stock worth watching in the coming years.

Frequently asked questions

Why is Suzlon Energy’s share price rising?

Suzlon Energy’s share price surge is driven by a combination of factors, including:
Strong financial performance
Debt reduction
Substantial order wins
India’s renewable energy goals

Mention the products of Suzlon Energy. 

Suzlon Energy is a wind turbine manufacturer and renewable energy that caters to:

Wind turbines
Solar panels
Energy storage solutions
Wind farm development and operation
Renewable energy consulting

What are Suzlon Energy’s growth prospects?

Suzlon Energy’s growth prospects are promising, given its strong order book, debt reduction, and India’s ambitious renewable energy targets.

In what markets does Suzlon Energy operate?

Suzlon Energy’s major markets include India, the United States, Europe, and South America. The company has a presence in over 30 countries and has installed over 19 GW of wind energy capacity worldwide.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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