Shares of Suzlon Energy Ltd. surged nearly 5% on the National Stock Exchange (NSE), reaching a 52-week peak of ₹40.50 today, following the company's incorporation into the MSCI India Index. The news sparked a flurry of buying activity, with approximately 4.20 crore shares changing hands by mid-morning.
The inclusion in the index is anticipated to bring substantial capital inflows to Suzlon Energy, with Nuvama estimating that the company will attract around $264 million starting from November 30. Currently enjoying a market capitalization of ₹5,491 crore (INR100 crore = approx. USD12 million), Suzlon has provided investors with impressive returns, posting a 393% gain over the past year and significantly outpacing the Nifty50 index.
In financial performance, Suzlon reported a robust increase in consolidated net profit for Q2 FY24, which soared over 81% to ₹102.29 crore (INR100 crore = approx. USD12 million). This surge in profits was attributed to reduced expenses across the board.
Earlier in August 2023, Suzlon achieved a milestone by becoming debt-free. The company made a remarkable turnaround from a net debt situation of ₹1,180 crore in March to holding a net cash position of ₹599 crore by September, thanks in part to a successful Qualified Institutional Placement (QIP).
Suzlon's operational metrics also reflect positive trends, with its orderbook standing strong at 1,613 MW by the end of Q2 FY24. The company's service business has been performing well, and SE Forge is laying down a solid foundation for future expansion.
Despite the positive news on profitability and financial health, Suzlon did experience a slight decrease in total income for Q2 FY24, which fell to ₹1,428.69 crore from ₹1,442.58 crore year-over-year (YoY). However, this was offset by a reduction in total expenses to ₹1,291.26 crore from ₹1,427.84 crore YoY. Additionally, Suzlon's quarterly net finance cost saw a decline by 61% YoY after its debt reduction initiatives.
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