Buy Suzlon Energy; target of Rs 74: Motilal Oswal

Motilal Oswal's research report on Suzlon Energy

Suzlon Energy's (SUEL) consolidated revenue came in at INR38.7b, exceeding our estimates by 39% (higher than expected deliveries), while EBITDA was 71% above our estimates at INR7.2b. SUEL delivered a strong 2QFY26 performance with deliveries coming in significantly above our and street expectations. Key positives for us from the conference call were: 1) management reiterated its confidence in a strong new order outlook, given the guidance of 6/8 GW of wind installations in India in FY26/27, 2) SUEL now has a tax shield for PBT up to INR50b (meaning no cash taxes at least until the end of FY27, on our estimates) and a potential to create additional deferred tax assets given the historical losses, and 3) SUEL outlined an execution pipeline of 1.8GW for FY26, which reaffirms its confidence in delivery guidance of 2.5 GW for FY26.

Outlook

We arrive at our TP of INR74 by applying a target P/E of 30x to FY28E EPS. This is close to its historical average two-year fwd P/E of 27x.