Over the past few weeks, Suzlon Energy has aggressively eliminated debt from its heavily levered balance sheet. First, it has divested its holding in Senvion (its German subsidiary) to raise a billion Euros. Second, in a swift affirmation of support for Suzlon, the promoters of Sun Pharma (Dilip Shanghvi and Associates, DSA) are picking up a 23% stake in Suzlon, via a preferential issue of 1 billion shares at Rs 18 a share.

"We believe Suzlon is on the cusp of a turnaround and can create significant shareholder wealth over the next few years," said HDFC Securities.

Macro and policy developments are helping, as is evident from the Indian government's intent to promote alternative energy. The return of accelerated depreciation, falling interest rates, renewed interest in India as a stable investment destination and better governance in the power sector all add up to a significantly better business environment for Suzlon, it added.

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