Merrill Lynch puts Rs 103 target on Suzlon

MUMBAI: Merrill Lynch has put ���buy��� on Suzlon Energy for the price target of Rs 103 per share. AGL Energy (Australia) placed a third repeat order on Suzlon for 113MW order (5% of international order book) after successfully monetizing the 2nd wind farm.

To be delivered in CY09, the order from AGL will account for 5% of Suzlon���s FY10E international volumes ex-REpower. For Suzlon, this is the first material global order after a lull of almost a year, as clients appreciate performance of its new V3 turbines.

���We now look for orders from China, USA and India. Inexpensive valuations drive our Buy; we see major new orders wins and resolution of payment to Martifier in May'09 as catalyst,��� said Merrill Lynch in a research note.

Suzlon Energy is the fifth largest wind-turbine manufacturer in the world with 10% global & over 50% market share in India. ���Its global delivery model, market leadership in India and focused approach to globalization are some of the key competitive advantages. The company enhances its competitive advantage by focusing on R&D in Europe, production in low cost countries such as India/China and focusing on sales in countries with high growth potential.��� the report said.

Approval of Suzlon���s methodology of retrofitting the cracked blades, should reassure clients and it could pave way for new orders. Funding of Horizon Wind���s Rattlesnake project in Dec���08 by JPM has proved that Suzlon���s V3 turbine is bankable in these markets.

���Suzlon Energy expects orders of 1GW in 1HCY2009 from China (150MW), Australia (200MW), USA (50-100MW) and India (50-200MW) to improve visibility of FY10E,��� the report added further.

Merrill Lynch expects Suzlon to emerge as 3rd largest global wind turbine company by FY11 led by: a) Multifold expansion in addressable market and new order wins - US, Brazil, China, Australia, Spain & EU, b) Maintenance of its 50 per cent share in India - access to 'windy' sites, concept-to-commissioning model and control over component supply, and the Global delivery model and focus on 3 of the world's top 5 future wind markets.