Suzlon Energy has been hogging the limelight and has been among the top gainers. The stock has gained over 8% in the last one week on accout of hefty order book and strong growth prospect in WTG, wind turbine generator, market worldwide.

Suzlon Wind has extended its contract with PPM Energy to add 300 MW of wind turbine capacity to become one of the largest single contracts in the history of the company and the U.S. wind energy industry. The original agreement calls for delivery of 300 MW of turbine capacity in 2008 and 100 MW of capacity in 2009, but now has been extended to include an additional 300 MW in 2009 for a total of 700 MW over two years.

The average annual WTG market is set to jump to 26GW/year over the next five years compared with 10GW/year over the previous five. Recently for the U.S. Department of Energy (DOE) Fiscal 2008 budget approximately $1.2 billion was allocated to the Office of Energy Efficiency and Renewable Energy -- up $60 million or 5 percent from 2007. The budget also calls for expansion in key energy programs that focus on developing clean and renewable energy including vehicle efficiency technology, $176 million; the Solar America Initiative, $148 million; hydrogen technology, $213 million (includes fuel cell development); and wind projects, $40 million.

Suzlon is leveraged to take advantage of this as it is one of the most integrated wind turbine manufacturers covering the entire value chain from wind turbine components to complete wind turbine systems. Suzlon has a combined manufacturing base of 2,700 MW of annual capacity, and is undertaking an aggressive expansion program to expand its base to 4,200 MW of capacity by January 2008.

Suzlon ranked as the world’s fifth leading wind turbine manufacturer with over 6% of global marketshare in 2005. The company has maintained over 50% marketshare in the domestic market.

Recently the company acquired RePower and the markets gave thumbs up to this acquisition as it was considered as a good strategic fit for Suzlon because it provides access to Europe and its product portfolio which is complementary to Suzlon and would be helpful to make inroads into Europe. The fact that the deal is staggered over a three-year period means that the acquisition would turn EPS positive from CY08E.

Citigroup has recommended abuy rating on the sock with a target price of Rs1,700 is based on a target P/E multiple of 23x FY09E which is supported by EPS CAGR of 44% and RoEs in the 30-40% range over FY07-10E.