Suzlon Energy shares climb 2% as CRISIL rating upgraded, gets tax penalty refund

Further, Suzlon will receive an income tax refund worth ₹172.76 crore after the Income Tax Appellate Tribunal (ITAT) ruled in its favour. The ITAT also cancelled a penalty worth ₹87.59 crore, both of which were originally imposed on the company by the National Faceless Penalty Centre of the Income Tax Department.

The scrip closed in the green at ₹62.29, up 1.42% on the last trading day of 2024 on the National Stock Exchange (NSE).

CRISIL Rating

CRISIL upgraded its rating for the second time this year. The credit rating agency upgraded Suzlon’s short-term ratings on the bank facilities to ‘CRISIL A/Positive/CRISIL A1’ from the previous ‘CRISIL A-/Positive/CRISIL A2+’.

The rating upgrade reflects an improvement in Suzlon’s wind turbine generators (WTG) vertical’s EBITDA margin, along with a stable cash flow from the operations and maintenance (O&M) services business and an uptick in orders, providing visibility for future revenues, CRISIL said in a ‘Rating Rationale’ circular dated December 30.

“The positive outlook reflects the possibility of better than expected EBITDA of WTG business on higher execution volumes and maintenance of working capital cycle,” the credit rating agency stated.

Tax penalty refund and cancellation

In two separate regulatory filings dated December 30 and 31, SEL revealed that it is set to receive a tax penalty refund worth ₹172.76 and have a ₹87.59 crore fine cancelled after the ITAT ruled in its favour.

The National Faceless Penalty Centre of the Income Tax Department imposed two penalties amounting to ₹172.76 crore and ₹87.59 crore on the company on March 27, 2024.

The ₹173 crore fine was in respect to “certain disallowances including that of claim of depreciation on goodwill for the financial year (FY) 2016-17”, while the ₹87.59 crore penalty was concerning “certain disallowances” in FY 2015-16.

The company filed an appeal against the two orders before the ITAT and it ruled in Suzlon’s favour.

Past stock performance

The scrip slumped 2.91% over the past five days and tumbled 5.79% over the past month on the NSE.

However, the stock has climbed 17.68% over the past six months and galloped 61.79% on a year-to-date basis.

The company has a total market cap of ₹85,009.21 crore as of December 31, 2024, according to the NSE.

SEL continues to hold a cumulative market share of approximately 32% in the Indian wind turbine segment, according to CRISIL.