Jobaaj Stories
In a bullish outlook, Motilal Oswal Financial Services has reaffirmed its positive stance on Suzlon Energy Ltd., citing improved project execution and increased domestic content as key drivers. The brokerage has revised its target price for the renewable energy major to Rs 75, suggesting a potential upside of up to 30% from current levels.
What’s Fueling the Optimism?
According to Motilal Oswal, the draft revised RLMM (Revised List of Models and Manufacturers) notification mandating higher local content in wind turbine manufacturing is likely to benefit Suzlon. As one of the few Indian OEMs with integrated domestic manufacturing capabilities, Suzlon is poised to gain market share, especially if the notification is approved.
"Should the regulation come into effect, we foresee a moderation in competitive intensity and a favorable market shift toward Indian manufacturers like Suzlon," the report added. Currently, domestic OEMs only account for 50–60% of new orders, leaving considerable room for growth.
Market Performance
On Wednesday, Suzlon Energy’s stock rose 2.70% to Rs 59.80, pushing its market capitalization past Rs 81,000 crore. Despite the gain, the stock is still down about 33% from its 52-week high of Rs 86.04, recorded in September 2024.
Focus on EPC & Export Potential
Suzlon is strategically increasing its share of EPC (Engineering, Procurement, and Construction) contracts to gain better visibility over project execution timelines. Additionally, Indian OEMs are exploring export opportunities, which may serve as another growth lever in the medium term.
Motilal Oswal estimates 2.4GW in deliveries by FY26, with strong visibility based on land acquisitions and power evacuation status of key projects. The brokerage expects Suzlon's revenue and adjusted PAT to grow at a CAGR of 46% and 58%, respectively, over FY25–27.
Valuation & Peer Commentary
Currently trading at 24x FY27E PE, Motilal Oswal considers Suzlon’s valuation attractive following recent corrections. The revised target price of Rs 75 is based on 32x FY27E EPS.
Another major brokerage, JM Financial, is equally optimistic, projecting a 56% YoY revenue increase to Rs 3,421.1 crore for Q4 FY25. JM expects EBITDA to grow 52% YoY to Rs 542.4 crore, and net profit to surge 75% YoY to Rs 444.7 crore.
Both brokerages maintain a ‘Buy’ rating on Suzlon, with JM Financial’s target set at Rs 71 and Motilal Oswal’s at Rs 75.
Disclaimer:
The content published by Jobaaj News is strictly for informational purposes only and does not constitute investment advice. Investors are strongly advised to perform their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions. Stock market investments are subject to market risks, and past performance is not indicative of future returns. Jobaaj News, its editors, and affiliates shall not be held responsible for any losses incurred based on this content.
