Synopsis:
Suzlon Energy is in focus as Motilal Oswal expects the stock to rise by another 42% citing favourable policy tailwinds, localised supply chain advantages, in-house R&D, and execution and readiness in comparison to global and local peers.
The shares of this renewable energy solution provider are in focus after the company fetched an upside target of 42 percent from its current level. In this article, we will discuss what led to the uptick.
With a market capitalization of Rs 78,245 crores, the shares of Suzlon Energy Ltd are currently trading at Rs 57.6 per share, down by 33 percent from its 52-week high of Rs 86.04 per share. Over the past five years, the stock has delivered a multibagger return of 1,772 percent.
Leading brokerage firm, Motilal Oswal, has maintained its Buy call on the stock with a target price of Rs 80 per share, signalling an upside potential of 42 percent from its previous day closing price of Rs 56.43 per share.
Motilal Oswal cited that it is optimistic about Suzlon Energy’s prospects, believing the company is in a great position to take advantage of supportive government policies, a localized supply chain, robust in-house research and development, and a readiness to execute better than both local and international competitors. These elements give Suzlon a competitive advantage as the renewable energy sector keeps growing.
In a recent conversation, Suzlon’s CEO, JP Chalasani, shared his dedication to steering the company toward a successful turnaround and growth, even in light of the CFO’s recent departure. He pointed out that the launch of an Approved List of Models and Manufacturers (ALMM) for wind turbine generators could play a crucial role in lessening India’s reliance on imports, with more localization requirements likely on the horizon.
Motilal Oswal anticipates that this transition will enhance domestic manufacturing, strengthen supply chains, and open up significant opportunities for Indian OEMs like Suzlon.
Reflecting this positive outlook, the brokerage has set a valuation for Suzlon at a price-to-earnings multiple of 35x FY27 EPS, which is a bit higher than its historical two-year forward average of 27x, as the company’s execution and earnings growth are picking up steam.
Financial Highlights
The company delivered impressive financial results in FY25, with revenue soaring over 66 percent to Rs 10,890 crore in FY25 from Rs 6,529 crore in FY24. Net profit also surged significantly, rising by more than 213 percent to Rs 2,072 crore compared to Rs 660 crore the previous year.
However, it is to be noted that the sharp jump in profit was primarily driven by a deferred tax gain of Rs 639.42 crore during FY25, which significantly boosted the bottom line.
Suzlon Energy Limited is a significant wind energy company focused on the sales and manufacture of wind turbine generators and components in India as well as global markets. Additionally, it carries out operations, maintenance, and project execution for wind projects. It also leases land, sells foundry and forging components, generates power, and conducts solar energy activities.
Written by Satyajeet Mukherjee
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