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Buy Suzlon Energy, target of Rs 53: Indiabulls Securities

Posted on: March 3rd, 2009 and is filed under Brokerage Recommendations.

Indiabulls Securities Research has recommended a buy rating on Suzlon Energy with a target price of Rs 53 in its March 02, 2009 research report. “Suzlon Energy Ltd. (SEL) reported a strong operating performance during Q3’09. Net sales for the Company (Wind Group and Hansen) increased 56.2% yoy to Rs 49.5 billion, mainly on account of better sales realisations and increased sales volumes. EBITDA increased 64% to Rs 6.4 billion due to a decline in raw material costs and a 21% yoy increase in the average realisation rate.”

“Though our near-term outlook for the Company has weakened because of the prevailing slowdown, we believe that the current market price more than factors the negatives. Based on our valuation, we have arrived at a target price of Rs 53 (assuming an 11.2% WACC and a 5% terminal growth rate). Since our target price provides an upside potential of 36% from the CMP, we give a Buy rating,” says Indiabulls Securities’ research report.

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