The shares of a prominent global renewable energy solutions provider, specializing in the installation and O&M (Operations and Maintenance) of Wind Turbine Generators (WTG) both in India and internationally, are in focus after the brokerage firm, JM Finacial cut its share price target by 11 percent citing execution challenges in the company.
Price Action
The shares of Suzlon Energy Ltd, with a total market capitalization of Rs 78,696.59 Crore on Thursday, were trading at Rs 57.68 per share which was on a flatter trend as against the previous closing price of 57.76.
The shares of Suzlon Energy Ltd have generated 55 percent in the past year, an impressive return of 540 percent in the past three years and 3,126 percent in the past five years.
Brokerage Target
Brokerage Firm, JM Financial after it visited one of Suzlon Energy’s plant had retained its “Buy” rating on the stock but has reduced its price target by 11 percent to Rs 71 per share from its previous target of Rs 80. The current target of Rs 71 implies a potential upside of 23 percent from its current levels.
Brokerage Rationale
JM Financial said it is easing the P/E of the company from 40 times December 2026 earnings to 35 times March 2027 earnings, stating execution challenges restricting growth beyond FY27, and is rolling forward its EPS estimate from December 2026 to March 2027.
After it visited the company’s Daman Plant, JM Financial noted that initiatives will strengthen its capabilities to handle increased volume and higher-rating wind turbine generators (WTGs).
The brokerage noted that the company remains optimistic about the revival of the industry and resolution of execution challenges in the coming two to three quarters. JM Financial added that the feedback on Suzlon’s performance of the 3 MW WTG has been very positive.
Execution Challenge
As per the brokerage note, the company said that order execution is a significant concern, especially the availability of land with clear RoW (right of way), which is likely to improve after two to three quarters. Typically, one WTG needs a footprint of 2.5 acres. The company is currently focusing on orders where land is available, like the orders from Jindal Renewables where land is available. The land is not in the scope of the company for around 80 percent of the order book.
The company holds land rights for 5.5 GW of capacity in Andhra Pradesh and Rajasthan. Its manufacturing capacity will grow from 3.15 GW to 4.5 GW, combining the capacities of the Daman and Pondicherry plants.
To meet rising domestic demand, Suzlon plans to expand its capacity at the Daman plant and gradually restart the Pondicherry plant of a similar size. This will increase its total rated capacity to over 4.5 GW per year.
Also read: 3M India: Is This the Perfect Stock for Long-Term Investors?
Clientele
Some of Suzlon’s marquee customers include ACC, Adani Renewables, ITC Ltd, ONGC, Reliance Industries Ltd, Shree Cement, TATA, Torrent Power, Vedanta, NTPC Renewables, BlackRock, Bajaj and more.
Order Book
The company has a record 5.9 GW order book, which is the highest-ever order book in the company’s history, and its Commercial & Industrial (C&I) customers account for 59 percent of the total order book.
On March 4, Suzlon secured a third order of 204.75 MW from the Subsidiary of Jindal Renewables, which is its largest Commercial & Industrial (C&I) order with a cumulative capacity of 907.20 MW. Previously, in February, it secured a repeat order of 201.6 MW from Oyster Renewable, with this order Suzlon’s partnership with Oyster Renewable has grown to 283.5 MW in Madhya Pradesh further strengthening the state’s renewable energy infrastructure.
Industry Overview
India’s energy demand is projected to grow at a CAGR of 7 percent from FY24 to FY30, surpassing the historical CAGR of 5 percent. The country aims for 122 GW of wind energy by 2031-32 and the C&I sector will see an accelerated demand of 78 GW of renewable energy by FY30. By 2047, electricity demand is projected to hit 708 GW, requiring a fourfold capacity increase to 2,100 GW, with wind at 400 GW.
Financial
The company reported a jump of 91 percent YoY in Revenue from operations from Rs 1,560 Crore in Q3FY24 to Rs 2,975 Crore in Q3FY25. Their Net Profit also jumped by 91 percent YoY from Rs 203 Crore to Rs 388 Crore over the same period. On the operating level, EBITDA grew by 102 percent YoY from Rs 248 Crore to Rs 500 Crore.
About Suzlon Energy Ltd
The Suzlon Group is a global leader in renewable energy, with around 20.9 GW of wind energy capacity installed in 17 countries and a cumulative market share of 31 percent in India. It operates in-house R&D centers in Germany, the Netherlands, and Denmark, along with state-of-the-art manufacturing facilities in India. Suzlon manages 15 GW of assets and an additional 6 GW internationally, offering advanced 2.x MW and 3.x MW series wind turbines.
Written By Adhvaitha Nayani
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