Buy Suzlon Energy, target Rs 15.80: KR Choksey Securities

KR Choksey Securities has a buy call on Suzlon Energy with a target price of Rs 15.80.

The current market price of Suzlon Energy is Rs 7.18.

Time period given by the brokerage is one year when Suzlon Energy price can reach the defined target.


Valuation & view of the brokerage on the company:
The prolonged timeline for settling grime has impacted Suzlon’s financial performance since the last few quarters.

We believe commissioning can ramp up post Q3FY19 and hence one can expect FY19 to be washout year as FY18.

On the other side, it is expected that SECI VI will open in Aug’18 and Suzlon historically garnered 25 per cent market share in terms of overall order wins.

Thus, this improves order backlog visibility in the coming period. Apart from this, the company is already into advance negotiation with few IPPs for 20 per cent of the earlier 7.5GW auctioned orders; any positive surprise can augur well for the company going ahead. We have lowered FY19E estimates, while maintained FY20E estimates.

We valued the company on SOTP basis and arrived a target price of Rs 15.8, upside potential of 119 per cent. We retain BUY rating on the stock.