Suzlon Energy Share Price Hits 5% Upper Circuit After Morgan Stanley Upgrade

Shares of Suzlon Energy Ltd. surged to hit a 5% upper circuit on Tuesday after Morgan Stanley upgraded the stock to 'overweight', citing recent stock correction and growth opportunity in wind original equipment manufacturer.

The steep 35% correction in wind turbine manufacturer's shares from 52-week high offers an opportunity, the global brokerage said.

The correction accounts for margin pressure in the second quarter, continued slowness in all India wind capacity addition and broad-based correction in the market, Morgan Stanley said.

The Pune-based company's strong business moat—ability to maintain competitive advantage—, large 5.1 gigawatts backlog and order growth potential from India's potential wind additions serve as key positives for the company.

The brokerage expects the company's market share to rise to 35-40% by fiscal 2027, versus 25% in the previous fiscal. Morgan Stanley has lowered its financial year 2025 sales volume estimate to 1.3 gigawatt versus 1.5 gigawatts earlier.

The company last week informed of the resignation of Ishwar Chand Mangal, chief executive officer of new business, effective Nov. 8. 

The wind turbine manufacturer reported a bottom line of Rs 200.6 crore in the July-September quarter, compared to Rs 102.3 crore in the same period last year.

Suzlon Energy's stock rose as much as 5% during the day to hit an upper circuit of Rs 62.2 apiece on the NSE. This compares to a 1.18% advance in the benchmark Nifty 50 as of 10:26 a.m.

It has risen 50% during the last 12 months and has advanced by 62% on a year-to-date basis. Total traded volume so far in the day stood at 2.9 times its 30-day average. The relative strength index was at 42.

Of the five analysts tracking the company, three have a 'buy' rating on the stock, and two suggest a 'hold', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 22%.