Ace Investor Mukul Agarwal Picks Fresh Stake in this Multibagger Renewable Energy Stock

Yesterday post market hours, a renewable energy player primarily involved in the wind energy space filed its June quarter shareholding and it was reported that ace investor Mukul Agrawal has bought a significant stake in it.

Before we move on to company details, let's look at who Mukul Agarwal is and what are his top stock picks.

Who is Mukul Agrawal?

Mukul Agrawal is a prominent investor in India, who is known for his microcap stocks and smallcap stock picks.

His style of investment involves a mix of offence and defence, with majority of time an offensive strategy after proper analysis and keeping two separate portfolios for investing and trading.

With over 55 stocks in the kitty, his portfolio is worth over Rs 30 billion (bn).

Which stock did Mukul Agrawal buy and why?

The latest shareholding pattern of Suzlon Energy shows that Agrawal bought 1.04% stake in the company in the quarter ended June 2023.

Prior to this, in the March 2023 quarter, he didn't have any stake in the company. Companies have to report the names of shareholders holding more than 1% stake in the firm.

Mind you, this doesn't seem like a speculative bet as his stake is now worth Rs 2.5 billion (bn).

While we don't know the exact reason why Agrawal invested in Suzlon Energy, there are some reasons we can guess...

The first reason could be the company's market dominance in the segment it operates in. Suzlon Energy is the market leader in wind energy and manufacturing wind turbine generators.

The company has a footprint across more than 17 countries. It claims to have the largest wind installed base as a wind energy OEM.

The company continues to increase its order book on the back of having a healthy market share of the wind turbine market in India.

As of May 2023, its order book stands at 1,542 MW compared to 788 MW in FY22.

The other reason behind his bullish stance could be the debt reduction that Suzlon has carried out in the past couple of quarters.

On the back of a higher order book, Suzlon has reduced its debt to Rs 19.5 bn as compared to Rs 63.9 bn in FY22.

The signs of recovery were visible when Suzlon carried out a rights issue worth Rs 10.9 bn.

Suzlon Energy is certainly on stronger footing now compared to previous years. In the past couple of years, Suzlon's wind turbine generator business was hit hard as the entire industry went into a slowdown.

However, this year, the company lowered its fixed costs and increased execution capabilities. This resulted in reducing losses.

Its full year FY23 results also seem quite encouraging.

• Consolidated FY23 PAT before any exceptional items turned positive after six years.
• Substantial reduction in net finance costs from Rs 7.1 bn in FY22 to Rs 4 bn in FY23.
• Net debt to EBITDA (pre-forex) is 1.4x vs 7x for FY22.
• Costs came under control as the economy and commodity prices stabilized.

All these reasons combined could've been the reason why Mukul Agarwal took such a big bet on the company.

How Suzlon Energy share price has performed recently

Yesterday, after it was revealed that Mukul Agarwal has picked stake in the company, Suzlon Energy share price hit 5% upper circuit on the BSE scaling its 52-week high of Rs 19.66.

In the past one month, the stock has rallied 40% while it has gained 220% in the past one year.

Suzlon has a 52-week high of Rs 19.66 touched yesterday and a 52-week low of Rs 5.4 touched on 28 July 2022.

About Suzlon Energy

Suzlon is a renewable energy solutions provider. The company is involved in the business of manufacturing, project execution and operation and maintenance of wind turbine generators and sale of related components.

The company's client portfolio includes power utilities and electricity producers in both the private and public sectors.

To know more, check out Suzlon's financial factsheet.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...