Edelweiss Research,
SUZLON ENERGY, CMP=241, BUY
Risk-reward favourable
Outlook and valuations: Risk reward favorable; upgrading to ‘BUY’
We still cannot completely rule out the risk of penalty being levied by customers due to delay in execution of orders and generation loss suffered during this program. However, with the management working on minimising the possible risks of generation and execution delay losses, we believe the risk reward is favourable for the stock post correction. We are revising our FY08E earnings estimate downwards by 10.2% due to the impact. With no change in FY09E and FY10E estimates, the stock is trading at 21.5x and 12.7x FY09E and FY10E earnings, which in our view, is attractive. We are upgrading our recommendation on the stock from ‘ACCUMULATE’ to ‘BUY’.
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