Suzlon at multi-year high as brokerages raise targets, shares zoom 227% in a year

In the FY24–26E period, Geojit Financial Services expects Suzlon’s revenue CAGR & ROE to surpass those of the industry peers. "We anticipate order inflows to be strong in this period, supported by strong government tendering and from commercial and industrial (C&I) customers," it said.

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Despite factoring in the risks in execution numbers, analysts at Geojit expect the revenue CAGR of 53 percent to drive the EPS growth of 66 percent CAGR, resulting in ROE improvement from 18.2 percent in FY24A to 26.9 percent in FY26E.

Improved executions, cost optimization from better work-force management, & better pass-through of commodity prices are expected to enable Wind turbine generators (WTG margin) improvement.

"Suzlon 2.0 is a de-levered, optimised, profit making business which has done away with its troubled past and is looking at a vibrant landscape of opportunities in India and abroad," said Geojit as it maintained a 'Buy' on the stock with a target price of Rs 73.

JM Financial too has reiterated its 'Buy' rating in Suzlon and raised the target price to Rs 71 from Rs 54 earlier.

"We believe that gradual building of momentum for higher execution, healthy order book, more healthy bid pipeline, strengthening of balance sheet and the organization are driving the company for the next-level of growth," JM Financial said.

Nuvama Institutional Equities, meanwhile, has downgraded the wind energy firm's stock, and while it stays long-term positive on Suzlon Energy, it said that the uptick in order inflows and profits is already factored in, as the stock now trades at 40 times estimated FY27 earnings per share (EPS) of wind turbine generator (WTG) business.

"We remain long-term positive on the sector and Suzlon Energy; however, the expected uptick in order inflow from H2FY25 seems to be already baked in the current market price," Nuvama said as it suggested a target price of Rs 64 on the stock.

According to analysts at Nuvama, Suzlon Energy is best-placed to capture demand with industry-leading EPC capacity (2GW yearly) and an optionality of repowering along with C&I demand, over and above 8–10GW of auctions.

Also Read | Suzlon Energy Q1 Net Sales at Rs 2,021.59 crore, up 50% YoY

However, it faces several risks that could impact its performance. Delays in the execution ramp-up of projects and a shortage of high Plant Load Factor (PLF) sites could hinder growth.

Additionally, issues such as renewables curtailment, inadequate transmission evacuation, and delays in the auction of renewable projects pose challenges.

Increased competitive intensity and a rising market share of Independent Power Producers (IPPs) further complicate the landscape. The discontinuation of the Inter-State Transmission System (ISTS) waiver adds to the uncertainty.

At 12:34 pm, Suzlon shares were trading nearly 3 percent higher at Rs 62.18 on NSE. Over the past year, Suzlon shares surged 227 percent, tripling investors' money.

In comparison, Nifty delivered returns of around 26 percent during the same period. The stock has delivered astronomical returns of 1,370 percent in the last five years.

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