408% return in a year: This midcap renewable energy stock hits 52-week high

Suzlon Energy shares extended their previous day's rally and hit a fresh 52-week high of Rs 42 apiece on the BSE on Thursday (November 16). At 10:22 am, shares of the renewable energy company were up 3.48 per cent to Rs 41.9.

The reason behind the recent trigger in the stock has been its inclusion in the MSCI India index. There are nine additions to the MSCI India index, and the changes in constituents will take place after the closing session on November 30, 2023, as notified by the index compiler, MSCI.

MSCI, which stands for Morgan Stanley Capital International, is a global provider of equity, fixed income, real estate indices, and multi-asset portfolio analysis tools. On the previous day, it re-shuffled its Emerging Markets Index. As per its website, the index has been constructed to enable investors to find new sources of return in rapidly growing economies around the world.

This rejig is seen to bring in a net inflow of foreign capital worth $1.5 billion. Besides Suzlon Energy, eight other stocks have also been included in the list, with no exclusion being made this time.

Additionally, the company, in an exchange filing, announced the RLMM listing of its S144-3 MW series of wind turbines, which are extendable to 3.15 MW, making them a formidable force in the market. This listing marks an important milestone for the successful commercialisation of the product.

"Suzlon has already installed the first prototype of this series at a hub height of 160m with a Hybrid Lattice Tubular (HLT) tower at the Gondal site in Gujarat. Currently, the product is in the process of serial manufacturing and commercialization," said the company's filing with the exchange.

"We believe that this product will go a long way in driving India’s renewable energy targets towards a more sustainable country. Our comprehensive product portfolio, led by dual-star products; the proven and successful S120–2.1 MW and the new S144 – 3‐3.15 MW product series of larger wind turbines, offers solutions for all Indian wind regimes and sites to increase generation and reduce LCoE (levelized cost of energy).”

Suzlon Energy shares in the last one year have galloped by a steep 409 per cent.

The stock is trading at a high Trailing Twelve Months (TTM) PE of 101. TTM PE is a type of price-to-earnings ratio where the current share price of any company is divided by its last four quarterly earnings per share (EPS). 

A high price-to-earnings ratio signifies that the stock is trading at a higher valuation in comparison to its peers in the industry. It can also be interpreted that the stock is available at expensive prices currently and may fall in the future. The stock’s P/E is crucial in making investment decisions.

The consensus recommendation on the counter from two analysts is a strong buy, Trendlyne data shows.