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News Topical, Digital Desk : Brokerage house UBS has given a buy call on four major OEM (Original Equipment Manufacturer) stocks of the power sector and has expressed hope of a tremendous growth of 20% to 40% in the coming year. Along with this, it has also maintained confidence in Thermax. UBS believes that the power sector has entered a new upcycle and the old giants will get an edge in this race.
BHEL: Golden times will return after bad times
UBS Rating: Buy
Target price: ₹340
Upside potential: 38%
Big point: Due to increase in thermal power orders, the company's profit may increase 8 times by FY28.
UBS believes that BHEL is moving ahead with the strength of the old times.
Waaree Energies: The fastest running horse
UBS Rating: Buy
Target price: ₹4,400
Upside potential: 40% (highest)
Big point: The company's capacity is increasing and between FY25–28, EBITDA margin may see improvement of up to 640 bps.
Premier Energies: Leading the solar plan
UBS Rating: Buy Target price: ₹1,340 Upside potential: 30% Positive factors: Premier Energies' 10 GW backward integrated capacity could see the company grow revenue by 34% and EBITDA by 36% between FY25–28. Suzlon Energy: Steady but strong move UBS Rating: Buy Target price: ₹78 Upside potential: 20% Highlights: Revenue and EBITDA expected to grow by 41% and 46% CAGR, respectively, over FY25–28. Delivery capacity may grow from 1.5 GW to 4.2 GW. Confidence in Thermax intact UBS has also maintained a 'Buy' rating on Thermax and raised its target price to ₹5,100. UBS says Thermax will remain a leader in its category and will benefit greatly from the upcoming upcycle. UBS believes that India's power sector is now moving towards not just growth, but multi-year growth. And this time the biggest leap will be made by those OEMs which are already standing in the field. Investors note: Many of these stocks have already given a good runup, but UBS believes that the real growth has started now. If you have a long-term perspective, then keep an eye on these stocks.
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