Company Website: Suzlon; NSE : SUZLON
On Rediff: Click here for Quotes, Financials and Other details
Industry Sector: Wind Energy Equipments
CMP: Rs. 241; Price Target: Rs. 400 in 12-18 months; Downside: Can fall to Rs.190
My Assessment:
Buy on dips until 300, Book some profits at 380. Hold the rest for > 5 years
(Always watch out for any developments that could affect the prospects).
Reasons to Buy (Opportunities):
. Global industry with huge potential for Integrated players like Suzlon
. Scaled up well through aggressive acquisitions for backward and forward integration
. Presence in all key markets - US, Europe and China, with good orderbook
. Potential for re-rating upon capacity expansion in FY09-10
. Will benefit from Green Energy push, esp. in Europe
. Has grown at CAGR of 90%+ in last 3 years
. Significant margin expansion as shown in recent quarterly result
. Current price is about 40% lower than its peak price
Reasons to Stay Away (Risks):
. Recent quality issues in certain US projects and orders cancellation
. Valuations of nearly 30 P/E on TTM basis (20 P/E at FY10 projections), means any issues with growth can affect the stock considerably
Research:
1. Click here for Recent Merril Lynch Research Report - Price Target of Rs. 360
2. Click here for Business Standard Research Article
Bharat Bond ETF
6 years ago
7 comments:
Good information Sundar, very useful. Thanks for sharing.
Kayal, Thanks for visiting. if u are not, better start investing - its never too early to start. I believe we cant hope to work through to retirement (we are more likely be made redundant than retired else risk work-life balance).
i too will start...ungala nambithaan iranguren..lolz..
// கார்க்கி said...
i too will start...ungala nambithaan iranguren..lolz..//
Good - welcome. Have a plan & start to have a stake in our economy.
Consider the first lot of money invested as your tuition fees - I had lost lot quite a bit of my initial investments in pre-online days, chasing dud stocks.
Have your set of thumb rules, first rule can be if u'd need ur money back in a hurry then stocks is not the place for that money. its important u differentiate trading and investing. Trading is like surfing, investing is like sailing. u need different approaches...u'll pick up ur own rules as you put more of your money ;)
Dear sundar,
I agree with you that the current market price is lower than the fair value of the company. But I do not feel the management is shareholder friendly simply because, I cannot understand the logic behind the Delisting of shares. I truly feel that the promoters/management is more interested in making money rather than getting worried about their reputation.
Yes, Sundar, you can continue to hold the shares. But the company will not continue to be a Public company, as they already hold 73% and institutions who will definitely sell out hold around 12%, another 5% will not be too difficult for the management to get.
And, most importantly, the promoters/management themselves have said that they expect the company to post lower profits for at least another 2 years. So, your idea of holding for Dividend Yield will not work out.
Do not marry a stock. Tender at least 80% of your holding and you can keep the rest. That is my advice.
Do you know the current market price of Suzlon?
// Vinitha said...
Do you know the current market price of Suzlon?//
thanks for your visit. of course know the current price too well :(
...its all relative. the financial world and world markets and stock valuations have chaned beyond recognition in the last few months.
fundamentals of capitalist as we knew a quarter back have changed and none knows for sure how its going to shape up in the next 12 months. I am quite humbled with the changes and trying to make sense of the new opportunities and risks from my perspective.
I am still betting on capitalist ways for building my wealth & my retirement. I feel thats the only way that would drive the world forward.
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