Suzlon Energy Shares Surge Following Morgan Stanley Upgrade Amid Strong Q1 Results

Suzlon Energy shares reached a 5% upper circuit limit on November 19, 2024, trading at Rs 62.37, following an upgrade from Morgan Stanley, which shifted its rating from 'Equal-weight' to 'Overweight'. This upgrade comes on the heels of Suzlon's impressive first-quarter results, where the company reported a 48% year-on-year revenue increase to Rs 2,103 crore and nearly doubled its net profit to Rs 200 crore. Morgan Stanley predicts that Suzlon's market share could rise to 35-40% by FY27 due to reduced competition in the renewable energy sector. The stock's recent 45% correction is viewed as a buying opportunity, especially as EBITDA grew by 31.3% to Rs 293.7 crore, despite a slight dip in margins. Since the beginning of the year, Suzlon shares have returned 55% and have gained an astonishing 670% over the past two years [e20eb911].

In contrast, Reliance Industries Ltd. reported a weak first quarter performance, leading to brokerages flagging downside risk to the company's earnings forecasts. The company's key oil-to-chemical business saw a sharp margin decline, partially offset by slightly better petchem spreads and ethane cracker economics. Citi has lowered Reliance Industries' fiscal 2025 and 2026 earnings per share forecast by 6% and 3% respectively. Macquarie and Nomura have also lowered their earnings forecast for the current year. RIL's net income of Rs 15,100 crore was 2% below brokerage estimates. Consolidated net debt moderated sequentially to Rs 1.12 lakh. Capex rose to Rs 28,800 crore compared to Rs 23,200 crore in the previous quarter. The telecom operations of the conglomerate will benefit from Jio's recent tariff hikes in the second quarter [6f5fc2a4].

Shares of Reliance Industries Ltd. tumbled over 3% on Monday after its consolidated net profit fell 18% sequentially in the first quarter of the current financial year. The oil-to-telecom conglomerate posted a profit of Rs 17,445 crore in the April–June period, in line with a consensus estimate of Rs 17,654.9 crore by analysts tracked by Bloomberg. Analysts have trimmed the earnings forecasts, citing the weak first-quarter performance. On the NSE, RIL's stock fell as much as 2.97% during the day to Rs 3,017.9 apiece, the lowest since June 27. The share price has risen 21.6% in the last 12 months and 17.5% on a year-to-date basis. Twenty-seven out of the 35 analysts tracking the company have a 'buy' rating on the stock, five recommend a 'hold' and three suggest a 'sell', according to Bloomberg data [e1f3e3f9].

Shares of Hindustan Unilever Ltd. hit a 52-week high on Tuesday ahead of the release of its first-quarter earnings. The consumer products company is expected to report a net profit of Rs 2,601 crore for the quarter ending June. Volume grew 3% over a year ago in Q1. The stock has risen 6% in the last 12 months and 2.7% on a year-to-date basis. Twenty-five out of the 41 analysts tracking the company have a 'buy' rating on the stock. The average of 12-month analyst price targets implies a potential downside of 6% [6eb855fe].

Bharat Heavy Electricals Limited (BHEL) reported a net loss of 2.13 billion rupees ($25.44 million) for the quarter ended June 30, 2024, compared to a net loss of 2.12 billion rupees a year ago. Total expenses climbed 9% to 58.75 billion rupees, driven by increased costs of materials and services. Revenue from operations rose nearly 10% to 54.85 billion rupees, fueled by a 4% rise in the power segment and a 30% surge in the industrial business. Rising costs put a damper on the outlook, with investor concerns over rising costs dampening profit margins. Competitors like Tata Power and Siemens are set to release their results next month, potentially highlighting industry-wide challenges and opportunities [55d9c178].

Dr. Lal Pathlabs reported lack of volume traction in its Q1 results, leading to Yes Securities staying away from the stock. Despite Suburban operating profit margin at 14% and penetration into tier-III and four towns, the lack of volume traction is a concern. The brokerage notes that the margin continues to hold at a higher level for Dr. Lal Pathlabs [3a107fd8].