The Street is betting big on these two energy stocks. Should you?

Long before power generation, wind was harnessed for many purposes - to propel sailing ships, pump water and grind grains with a grindstone. As renewable energy took centre stage in sustainability conversations, the modern-day application of wind turbines to generate electricity came into existence. In India, wind turbine manufacturers (OEMs) like Inox Wind and Suzlon Energy were among the frontrunners as they moved to capitalise on growing calls for adoption of renewable energy. The industry ascended on the country's priority list, leading to tight government regulation and high intervention. The long-term nature of projects further makes the business working capital intensive, resulting in little profitability. However, in the last year, stocks of Inox Wind and Suzlon Energy have become the Street's favourites. The S&P BSE Energy index reported a staggering 64 per cent growth (as of April 8, 2024) amid steadily growing bullish sentiment towards renewable energy. The run up piqued our interest, forcing us to look into what's behind this outperformance. Here's what we found: The return to profitability After years of losses, both Inox and Suzlon managed to break the streak recently. Inox reported two straight quarterly profits (Q3 and Q4 FY24) after it was last profitable in 2017. Suzlon Energy, too, turned profitable for the entire year (FY23) after a gap of six years. Behind the turnaround is the strengthening of their order books due to the growing demand for wind energy. In Q3 FY24, Inox's order book jumped over 100 per cent. While it has maintained a large ord