Merrill Lynch maintains buy on Suzlon Energy
Merrill Lynch has maintained its “buy” rating on Suzlon saying the company remains on track for material scale-up in operations across the wind turbine value chain.
By ET Bureau |
Suzlon Energy
CMP: Rs 225.45
Target Price: Rs 370
Merrill Lynch has maintained its ���buy��� rating on Suzlon saying the company remains on track for material scale-up in operations across the wind turbine value chain. Suzlon, says the Merrill note, has pre-poned its purchase of Martifer���s 22.48% stake in REpower for a pre-determined price of 270 million pound sterling. ���This acquisition shall consolidate Suzlon���s holding in REpower to (approx.) 90%, enough to press for a domination agreement, which is key for integrating REpower and derive synergy benefits from a unified product and market strategy,��� the note said. Merrill has valued Suzlon���s wind business at 18.5 times estimated 1-year-forward earnings, at Rs 296 per share. ���This is conservative given it is 20% and 25% discount to its current PER (price to earning) and peers respectively. Suzlon���s 71.3% stake in Hansen is valued at Rs 76 per share at 10% discount to the price objective of 330 pence,��� the note added.
CMP: Rs 225.45
Target Price: Rs 370
Merrill Lynch has maintained its ���buy��� rating on Suzlon saying the company remains on track for material scale-up in operations across the wind turbine value chain. Suzlon, says the Merrill note, has pre-poned its purchase of Martifer���s 22.48% stake in REpower for a pre-determined price of 270 million pound sterling. ���This acquisition shall consolidate Suzlon���s holding in REpower to (approx.) 90%, enough to press for a domination agreement, which is key for integrating REpower and derive synergy benefits from a unified product and market strategy,��� the note said. Merrill has valued Suzlon���s wind business at 18.5 times estimated 1-year-forward earnings, at Rs 296 per share. ���This is conservative given it is 20% and 25% discount to its current PER (price to earning) and peers respectively. Suzlon���s 71.3% stake in Hansen is valued at Rs 76 per share at 10% discount to the price objective of 330 pence,��� the note added.
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