Penny stocks can be highly risky because they equally carry the prospects of giving good returns if the fundamentals are strong. Nonetheless, here we will discuss a stock which has started improving its financials of late and is in the futuristic renewable energy space- Suzlon Energy. The company last traded at Rs. 9.89 per share on the NSE as on March 14, 2022
About the company
This is a small cap stock that is the world's leading renewable energy provider with presence in 17 countries Asia, Australia, Europe, Africa and the Americas, Suzlon is a leader in wind energy providing a complete solutions package. The company has more than 12,224 wind turbines installed across six continents and 14 world-class, wind turbine manufacturing facilities in India, and it's wind energy solutions are at a competitive advantage. The company's WTGs carry the mark of reliability and sustainability.
The company also has its mark in solar energy and a registered 1500 MW wind-solar hybrid park in the state of Rajasthan. So, using its utility-scale wind and solar parks, the company is well placed in power generation, land procurement, liaison and working with various state utilities in India, to develop solar-wind-storage hybrid projects.
Renewable energy growth prospects
Energy consumption in the country which is the third largest consumer worldwide is increasing at a huge rate and its production by conventional means to meet the current demand is not possible, so here is where renewable energy comes to play. So, in nutshell as per reports while the stock markets say it to be a future theme, reports suggest that the country is targeting about 450 Gigawatt (GW) of installed renewable energy capacity by 2030 - about 280 GW (over 60%) is expected from solar.
Suzlon Energy’s financials
The company has been discussed for its business venture as it is to make a good mark going ahead. Nonetheless, whether or not it shall be a profitable concern going ahead is slightly sceptical, though the company has got a chance to turnaround itself. To put it forth, the NCLT route for the company was earlier ruled out. Now coming to its financials, the company's FY21 revenue is showing an increase, the company's also during the same Fy turned positive. Net income also turned positive to Rs. 104.18 crore.
Talking about its last quarter financial results, the company's income from operations increased to Rs. 1000.18 crore, while loss profit also narrowed to Rs.182.28 crore as against Rs. 229.22 crore in the same quarter last year. Talking about its debt situation, the company which has heavily in debt has sharply reduced its debt to 4790.11 crore. So, with the current projects at hand, if the company is able to implement its projects then the situation at the firm can turn in its favour.
We have picked up this stock as there are hopes that the company would emerge as a leader in the renewable energy space but for that it has to overcome the hurdles at hand. So, being the penny stock it carries high inherent risk and only if it shows the mettle, it even seems to generate good returns for its investors.