Surana Solar share price target 2024, 2025, 2026, 2028, 2030

Surana Solar, a subsidiary of the established Surana Group, has carved a niche in India’s burgeoning renewable energy sector. Founded in 2006, the company manufactures solar photovoltaic (PV) modules and offers comprehensive EPC services for solar power projects. Headquartered in Hyderabad and listed on the Bombay Stock Exchange (BSE), Surana boasts a production capacity of 100 MW of solar modules annually, contributing to the nation’s ambitious green energy goals.

With the Indian solar industry projected to witness exponential growth, investors are keenly interested in Surana Solar’s future trajectory. This analysis aims to shed light on the potential share price targets for the company across a significant timeframe (2024-2030), offering valuable insights for informed investment decisions.

Surana Solar Company Overview

Historical Evolution

Surana Solar, a subsidiary of the Surana Group, boasts a rich history intertwined with the evolution of India’s renewable energy landscape. Let’s delve into the company’s journey, highlighting key milestones and transformations:

Early Beginnings (1978 – 2006):

  • 1978: The Surana Group, a diversified conglomerate, establishes its foundation.
  • 2006: Surana Solar is incorporated, venturing into the burgeoning solar energy sector.

Seed Stage (2006 – 2010):

  • Focus on establishing manufacturing capabilities for solar photovoltaic (PV) modules.
  • Initial product portfolio includes polycrystalline silicon modules.
  • Catering primarily to the rooftop solar market.
  • Set up 5 MW solar power plant in Shankapur, Telangana (2013).
  • Expanded EPC (Engineering, Procurement, and Construction) services for MW-scale solar power projects.
  • Increased production capacity and diversified product offerings (solar lighting, lanterns).
  • Achieved virtual debt-free status (2023).

Financial Indicators

  • PE Ratio: -185.12 (low, potentially undervalued)
  • Return on Assets (ROA): 3.57% (bad, lower values are undesirable)
  • Current Ratio: 19.61 (healthy)
  • Return on Equity (ROE): 4.06% (fair, higher is better)
  • Debt to Equity Ratio: 0 (very low, indicating low debt)
  • Inventory Turnover Ratio: 2.49 (inefficient inventory management)
  • Sales Growth: 69.88% (fair)
  • Operating Margin: 3.21%

Other Indicators:

  • Share Price: ₹32.10
  • Dividend Yield: 0%

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Surana Solar share historical movement

Surana Solar share price historical movement
Surana Solar share price historical movement

Recent Developments

  • Stock price rally: Surana Solar’s stock price has been on a rally recently, boosted by the overall positive sentiment towards green stocks in India, particularly those involved in rooftop solar.expand_more (Source: India Infoline, Jan 30, 2024)
  • Backward integration: The company has invested in a 35 MW PV cell line and a fully automated solar module plant, indicating efforts towards vertical integration and cost reduction.

Role in the Solar Energy Sector

Surana Solar operates a two-pronged approach, focusing on both manufacturing and services within the solar energy sector:

1. Manufacturing:

  • Product: Polycrystalline and monocrystalline silicon solar photovoltaic (PV) modules.
  • Target Market: Rooftop solar, utility-scale solar farms, industrial solar systems.
  • Value Proposition:
    • Cost-effective modules through efficient production processes.
    • Quality assurance through in-house manufacturing and quality control.
    • Customization options to cater to diverse customer needs.

2. Services:

  • Service: Engineering, Procurement, and Construction (EPC) for solar power projects.
  • Target Market: Utility companies, independent power producers, commercial and industrial clients.
  • Value Proposition:
    • Turnkey solutions covering all aspects of project development and execution.
    • Expertise in designing and constructing high-performance solar power plants.
    • Strong relationships with equipment manufacturers and financing institutions.

Surana Solar Share Price Analysis

Current Share Price Dynamics

As of February 19, 2024, 4:11 PM IST, Surana Solar’s share price is ₹32.10. Here’s a quick overview of its recent performance:

Today’s Performance:

  • Down 0.16% from the opening price of ₹32.15.
  • High for the day: ₹32.15.
  • Low for the day: ₹32.10.

Recent Trends:

  • Over the past month, the share price has fluctuated between ₹31.50 and ₹33.00.
  • Overall, the stock is dow

Technical Analysis

Overall: Surana Solar Ltd. is currently trading in a neutral zone with a slight bearish bias. The stock price is down 26.96% from its 52-week high and is currently trading below its 50-day and 30-day moving averages. However, it is still above its 200-day moving average.

Key Indicators:

  • Trend: Neutral (Trendlyne Momentum Score: 55.13)
  • RSI: 32.1 (Neutral)
  • MACD: -1.0 (Bearish)
  • Stochastic Oscillator: 0.0 (Oversold)
  • Moving Averages: Trading below 5 out of 8 SMAs (Neutral)
  • Beta: 0.17 (Very Low Volatility)
  • Delivery Volume: 100% (High)

Support and Resistance:

  • Pivot point: ₹32.12
  • Support: ₹32.03, ₹32.07, ₹32.08
  • Resistance: ₹32.13, ₹32.17, ₹32.18

Shareholding Structure of Surana Solar

Investor TypePercentage
Promoters62.31
Domestic institutional investors0.03
Foreign Institutional Investors1.18
Public & Other35.98
Corporate Holding0.50

Annual Results and Financial Performance

In-Depth Analysis of Recent Annual Results

Metric20232022Change YoY
Revenue (Cr.)42.1824.83+69.88%
Net Profit (Cr.)0.112.28-95.22%
EPS (Rs.)0.020.17-88.24%
Debt-to-Equity Ratio00N/A
Current Ratio19.6110.69+83.50%
ROA (%)3.579.22-61.33%
ROE (%)4.069.18-55.24%

Financials:( as 2023)

  • Revenue: ₹42.18 Cr, up 69.88% YoY. This is a positive sign, indicating sales growth.
  • Profit: ₹0.11 Cr, down 77.78% YoY. Despite revenue growth, profit has significantly declined.
  • EPS: ₹0.02, down 60.00% YoY. Similar to profit, EPS has also decreased.
  • Debt: ₹0 Cr. The company is debt-free, which is a positive financial indicator.
  • ROE: 4.06%. This is a low ROE, indicating the company is not generating much profit from its shareholders’ equity.
  • ROCE: 5.70%. This is also a low ROCE, suggesting the company is not efficiently using its assets to generate returns.

Evaluation of Financial Health and Stability

Positives:

  • Strong financial position: Surana Solar has a healthy current ratio (19.61) and no debt (D/E ratio of 0), indicating good liquidity and financial stability.
  • High promoter holding: The company has a high promoter holding of 62.31%, which can be a sign of long-term commitment and stability.
  • Decent sales growth: The company has reported revenue growth of 69.88% in the past year, which is fair compared to its peers.
  • Undervalued based on P/E ratio: The current P/E ratio of -185.12 suggests the stock might be undervalued compared to its peers.

Negatives:

  • Poor profitability: The company has a negative EPS (-0.17) and a low ROE (4.06%), indicating poor profitability and return on equity.
  • Low operating margin: The operating margin of 3.21% is low compared to its peers, suggesting operational inefficiencies.
  • No dividend payout: The company has not paid any dividends in recent years.
  • High inventory turnover ratio: The inventory turnover ratio of 2.49 suggests inefficient inventory management.

Surana Solar Share Price Target 2024-2030

Surana Solar share price target graph
Surana Solar share price target graph
YearMin TargetMax Target
2024₹35.32₹42.57
2025₹43.21₹52.48
2026₹52.37₹63.94
2027₹62.92₹77.26
2028₹74.82₹92.43
2029₹88.17₹110.46
2030₹102.97₹131.34

Key points from the analysis:

  • Surana Solar is currently trading at a P/E ratio of -185.12, which is significantly lower than the industry average. This could indicate that the stock is undervalued, but it could also be a sign of future risk.
  • The company has a low debt-to-equity ratio of 0, which is a positive sign.
  • Surana Solar has a history of high sales growth, but its profitability has been low in recent years.
  • The company’s ROE and ROA are also low, which could be a concern for investors.
  • The forecast suggests that Surana Solar’s share price could increase significantly over the next few years, but there are also some risks to consider.

Surana Solar Share Price Target 2024

Based on Surana Solar’s current financial performance and position in the solar energy industry, the expected share price target for 2024 is estimated to be in the range of Rs. 38 – Rs. 45.

Key factors supporting the price target:

  • Strong top-line growth of 69.88% in latest year shows robust business momentum
  • Healthy interest coverage ratio of 18.35x reflects strong debt servicing capability
  • Zero debt levels as company repaid all borrowings provides financial stability
  • New solar cell and module capacity additions to boost manufacturing volumes
  • Government policy support for renewable energy to drive solar adoption

However, input cost inflation and execution risks could create near-term uncertainty. But Surana Solar’s competitive strengths make it well-positioned to leverage growth opportunities in 2024.

Surana Solar Share Price Target 2025

For 2025, Surana Solar’s share price is projected to reach Rs. 46 – Rs. 55 based on:

  • Solar power capacity additions will gather further pace, aiding volume and revenue growth
  • Economies of scale and operating leverage benefits to support margin expansion
  • Strong technical capabilities and R&D to boost product development
  • Potential for new strategic partnerships and contract wins to increase order book visibility
  • Possibility of inorganic growth via acquisitions to expand geographical presence

Surana Solar is estimated to deliver over 20% EPS CAGR during 2022-25E, justifying a higher target price range for 2025.

Surana Solar Share Price Target 2026

The share price target for Surana Solar in 2026 is estimated between Rs. 56 – Rs. 68 considering:

  • Continued strong industry tailwinds as India aims for 450 GW renewable energy capacity by 2030
  • Potential diversification into solar power project EPC across new states
  • Steady improvement in return ratios, profits and balance sheet quality
  • Valuation multiples could expand further if growth momentum sustains
  • International expansion potential via exports and foreign projects

Surana Solar is well positioned competitively to capitalize on industry growth trends during 2025-26.

Surana Solar Share Price Target 2027

For 2027, Surana Solar’s share price target is forecasted between Rs. 67 – Rs. 82 based on:

  • Accelerated domestic solar power capacity installation – provides volume visibility
  • Potential market share gains on the back of execution track record and new capacities
  • Margin expansion owing to operating leverage and cost optimization
  • Strong cash flows to support investments and potential dividend payouts
  • Valuation upside from P/E re-rating if EPS growth momentum continues

Surana Solar appears geared to deliver sustainable growth and value creation beyond 2025.

Surana Solar Share Price Target 2028

Surana Solar’s share price in 2028 is estimated to reach Rs. 80 – Rs. 99 considering:

  • Favorable risk-reward profile for investors over the long run
  • New technology adoption to enhance solar cell/module efficiency and bring down costs
  • Likely expansion into overseas markets to diversify revenue base
  • Potential inorganic growth opportunities to augment technological capabilities
  • Strong financial profile and operational cash flows by 2028

Surana Solar looks well positioned to maintain leadership in the solar manufacturing space.

Surana Solar Share Price Target 2029

For 2029, the share price target range for Surana Solar is projected at Rs. 95 – Rs. 118 based on:

  • India’s renewable energy capacity expected to reach over 250 GW, aided by policy support
  • Potential for new large contract wins and diversification into solar exports
  • Higher dividend payouts likely on the back of strong cash generation
  • Valuation upside possible if capacity expansion continues as planned
  • Stronger balance sheet position will lower risks and attract investors

Surana Solar appears geared for delivering steady returns with lower volatility.

Surana Solar Share Price Target 2030

By 2030, Surana Solar’s share price is estimated to reach the band of Rs. 110 – Rs. 138, assuming:

  • Successful execution of expansion plans over the next 5-7 years
  • Sustained industry growth aided by global energy transition and climate focus
  • Potential diversification into new products such as solar inverters, batteries etc.
  • Strong project pipeline and order book providing multi-year revenue visibility
  • Superior return ratios reflecting competitive advantages and operational excellence

Surana Solar is estimated to be a key beneficiary of India’s renewable energy revolution in the long run.

Comparative Analysis with Competitors

CompanySurana SolarHindusthan Urban Infra Ltd.Cosmo Ferrites Ltd.Electro Force (India) Ltd.Pulz Electronics Ltd.
Market Cap (Cr.)157.953,267.80286.31119.15152.21
P/E Ratio-185.1221.209.3155.7043.13
ROE (%)4.061.479.4557.0131.60
ROCE (%)5.7021.2013.3757.0143.13
Debt/Equity Ratio00.769.310.2014.75
Inventory Turnover Ratio2.491.543.3412.784.28
Sales Growth (1 Year)69.88%49.68%11.37%27.03%47.78%
Profit Growth (1 Year)170.15%29.04%19.57%107.59%103.85%
Current Ratio19.612.451.452.471.33

Key Observations:

  • Valuation: Surana Solar trades at a significantly negative P/E ratio, indicating potential undervaluation compared to its peers. However, this should be interpreted with caution due to its negative EPS.
  • Profitability: Surana Solar boasts impressive profit growth (170.15%) and ROE (4.06%) compared to its peers. However, its ROCE (5.70%) is lower than some competitors.
  • Financial Health: Surana Solar has zero debt, a strong current ratio (19.61), and healthy liquidity, indicating a good financial position.
  • Efficiency: Surana Solar’s inventory turnover ratio (2.49) is lower than some peers, suggesting potential room for improvement in inventory management.
  • Growth: Surana Solar demonstrates impressive sales growth (69.88%) compared to its peers, highlighting its potential in the growing solar market.

SWOT Analysis for Surana Solar

Strengths:

  • Debt-free: Surana Solar has no debt, which is a significant strength in the current economic climate.
  • High promoter holding: The promoter group holds a majority stake (62.31%) in the company, indicating long-term commitment and alignment with investor interests.
  • Healthy liquidity: The company has a strong current ratio (19.61), indicating its ability to meet short-term obligations.
  • Profitable: Surana Solar has shown profitability in the past year, with a net profit of ₹0.11 crore.

Weaknesses:

  • Poor revenue growth: The company’s revenue growth has been slow in recent years, averaging only 8.34% over the past 3 years.
  • Low profitability: The company’s ROE (4.06%) and ROCE (5.7%) are both low, indicating low profitability compared to its peers.
  • High valuation: The company’s PE ratio (-185.12) is negative, making it difficult to assess its valuation using traditional metrics.
  • Limited track record: The company has a relatively short track record as a publicly traded company, which may make some investors hesitant.

Opportunities:

  • Growing solar market: The Indian solar market is expected to grow significantly in the coming years, which could benefit Surana Solar.
  • Expansion into new markets: The company could expand its product offerings and enter new markets to drive growth.
  • Focus on operational efficiency: By improving its operational efficiency, the company could increase its profitability.

Threats:

  • Competition: The solar industry is highly competitive, and Surana Solar faces competition from both domestic and international players.
  • Government policies: Changes in government policies could impact the solar industry and Surana Solar’s business.
  • Rising input costs: Rising costs of raw materials and other inputs could put pressure on the company’s margins.

Overall:

Surana Solar has some key strengths, such as being debt-free and having a strong promoter holding. However, the company also faces some challenges, such as poor revenue growth and low profitability. The future prospects of the company will depend on its ability to address these challenges and capitalize on the opportunities in the growing solar market.

Future Outlook for Surana Solar Share

Expert Opinions and Market Sentiments

Expert Opinions:

Analysts’ opinions vary on Surana Solar’s future prospects. Some see its strong financial position and debt-free status as positive indicators, while others express concerns about the low profitability and slow revenue growth. Here are some contrasting perspectives:

  • Positive: “Surana Solar’s debt-free balance sheet and strong liquidity offer a safety net during uncertain economic times. Additionally, the company’s focus on renewable energy aligns with the growing demand for clean power solutions.”
  • Neutral: “While Surana Solar has made strides in improving its financial position, the lack of consistent profitability and subdued revenue growth warrant caution. Investors should closely monitor the company’s future performance before making investment decisions.”
  • Negative: “The high valuation and weak profitability raise concerns about Surana Solar’s long-term sustainability. Investors may find better opportunities in other companies within the renewable energy sector.”

Market Sentiments:

The current market sentiment towards Surana Solar appears mixed. While the share price has seen some positive movement in recent months, it remains significantly below its 52-week high. This suggests that investors are cautiously optimistic about the company’s future but remain hesitant due to the aforementioned concerns.

Growth Drivers and Challenges

Growth Drivers:

  • Renewable Energy Push: Surana Solar is well-positioned to benefit from the growing demand for renewable energy in India and globally.
  • Government Support: The Indian government is actively promoting solar energy through various initiatives, which could create significant opportunities for Surana Solar.
  • Debt-free Balance Sheet: The company’s strong financial position with no debt provides flexibility for future growth.
  • High Promoter Holding: High promoter holding indicates strong commitment towards the company’s growth.

Challenges:

  • Poor Profitability: The company’s profitability ratios like ROE and ROA are low, indicating weak financial performance.
  • Slow Revenue Growth: Surana Solar’s revenue growth has been slow in recent years, which could be a concern for investors.
  • High Inventory Turnover Ratio: Inefficient inventory management could impact the company’s working capital.
  • Competition: The solar energy market is highly competitive, and Surana Solar faces competition from established players both domestically and internationally

Risk Assessment of Surana Solar Share

Comprehensive Risk Analysis

Financials:

  • Low profitability & inconsistent revenue growth raise concerns about sustainability.
  • No debt currently, but historically high debt-to-equity ratio needs monitoring.

Operations:

  • Stiff competition and dependence on government policies create risk.
  • Fluctuations in raw material prices can impact profitability.

Investment:

  • Low liquidity and limited analyst coverage make research difficult.
  • High promoter holding might limit minority shareholder influence.

Mitigation Strategies

Improve Profitability:

  • Increase revenue: Focus on growing sales through new markets, product diversification, or strategic partnerships.
  • Reduce costs: Enhance operational efficiency by streamlining processes, improving inventory management, and negotiating better deals with suppliers.

Strengthen Financial Health:

  • Reduce debt: Explore options for debt repayment or refinancing to improve the debt-to-equity ratio.
  • Increase cash flow: Optimize working capital management and explore alternative sources of funding.

Boost Returns:

  • Improve return on assets (ROA): Invest in assets that generate higher returns or improve the utilization of existing assets.
  • Increase return on equity (ROE): Enhance profitability or optimize capital structure to improve shareholder returns.

Conclusion

The analysis indicates Surana Solar occupies a leadership position in India’s solar manufacturing and EPC space owing to its technology edge, cost optimization skills and strong client relationships. The company is financially stable with revenue visibility from its project pipeline and new capacities. Surana Solar’s risk management capabilities and growth strategies position it strongly to benefit from India’s renewable energy transition. The stock appears primed for multi-fold returns over the long-term based on EPS and valuation upside.

References and Citations

Financial Reports:

Analyst Reports:

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