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Suzlon Energy, a leading wind turbine manufacturer, witnessed a significant surge in its share price towards the close of trading on the National Stock Exchange of India (NSE). This upswing was driven by the company's recent signing of a framework agreement with a subsidiary of CESC, a prominent power utility firm.
In an exchange filing released on Monday, CESC disclosed that its step-down subsidiary, Purvah Green Power Pvt. Ltd., has entered into a framework agreement with Suzlon Energy. This agreement encompasses the supply, engineering, procurement, and construction (EPC), as well as operations and maintenance (O&M) of wind turbines. The agreement stipulates that the wind turbines will be commissioned over a period spanning two to four years.
While the agreement's specifics regarding the order's commercial implications and the quantum of the orders remain undisclosed, the news sparked a positive sentiment among investors. The deal represents a significant boost for Suzlon Energy, bolstering its position as a key player in India's burgeoning renewable energy sector.
Suzlon Energy has been making strides in recent times, undergoing a comprehensive deleveraging process that has strengthened its financial position. This restructuring has also led to a leaner organizational structure, characterized by reduced fixed operating costs. The company's efforts to streamline its operations have paved the way for sustainable growth and profitability.
Morgan Stanley, a prominent investment bank, has expressed its optimism about Suzlon Energy's future prospects. In a recent note, the brokerage firm highlighted that Suzlon 2.0 is well-positioned to capitalize on the ongoing energy transition in India. The bank believes that Suzlon's growth potential is yet to be fully recognized by the market, anticipating that the company will secure wind orders worth 32 gigawatts (GW), equivalent to approximately $31 billion, over the next five years.
The market's positive response to the framework agreement is evident in the substantial rise of Suzlon Energy's share price. The stock recovered nearly 2% from the day's lows and is currently trading at ₹54.59, reflecting a 0.2% increase. Notably, the stock has registered a remarkable 42% surge in value year-to-date (YTD) in 2024.
The agreement with CESC's subsidiary is a testament to Suzlon Energy's commitment to sustainable energy solutions and its ability to secure significant projects in the renewable energy space. The company's focus on deleveraging, streamlining operations, and expanding its market presence has positioned it for continued growth and success in the years to come.
Source: Suzlon Energy shares see a sharp spike towards the close of trade; Here's why