Suzlon Energy stock jumped 16 per cent on Thursday after the company announced that its subsidiary had bagged an order for a 350 MW project in Canada.
According to the company, it is the largest order that REpower has bagged to date.
According to analysts, another main reason was short covering due to today’s derivative contracts settlement. As the company is soon going to be out of the F&O list, traders short-covered their positions, they said. REpower Systems SE, based in Hamburg, will supply the Canadian unit of Electricite de France SA 175 turbines, each capable of producing 2 MW, Suzlon said in a statement to stock exchanges.
After touching the day’s high of Rs 25.65, the stock closed at Rs 24.50 with 3.76 crore shares changing hands against its two-week average of 76 lakh shares on the BSE. The stock has been on the rise since January 25, after the empowered group of the corporate debt restructuring (CDR) cell approved company’s Rs 9,500-crore proposal for debt rejig. Besides, the company has been maintaining order flows. Recently, Suzlon bagged a 50 MW order from Orange Renewable Power and a 22 MW repeat order from Sri Kumarswamy Mineral Exports Pvt Ltd.
“The debt restructuring will give Suzlon the much-needed breathing space, but that alone will not help the company. For Suzlon, REPower is the trump card, and its contribution is the key going forward,” said Jagannadham Thunuguntla, Strategist and Head of Research at SMC Global Securities.
On Wednesday, the market regulator had disposed of proceedings against Suzlon Energy, its Chairman Tulsi Tanti and four other executives through the consent route.