Suzlon Energy is making a statement with stronger order book, record deliveries and a wider renewable energy play. However, it is now facing a familiar challenge in a different form: How to convert rapid growth into sustainable profitability.
While revenues rose 45% in Q4FY26 and 22.5% in Q1FY27, the Ebitda margin fell to 15.5% in the June quarter from 19% a year earlier, as the company incurred higher costs while investing in its next phase of expansion.
The margin pressure comes even as key operating metrics have strengthened. Suzlon delivered 506 MW in Q1FY27, its highest-ever first-quarter deliveries, despite supply chain and logistics disruptions caused by geopolitical tensions in West Asia. The disruptions deferred an estimated 10-20% of deliveries, which the company expects to recover in the coming quarters, group CEO Ajay Kapoor said during the earnings call.
Installations more than doubled to 269 MW from 117 MW in Q1FY26, while realisations increased to `6.3 crore per MW from `5.6 crore, helped by a higher EPC mix. Analysts, however, see the decline in margins as an evidence of the trade-off Suzlon is making between growth and profitability.
An email sent to the company on the subject did not elicit any response.
The company has come a long way from the losses it had incurred between FY20 and FY22. Revenue has grown at a 34% CAGR since FY20, while FY26 profit rose 52% to Rs 3,159 crore.
The company is now using that recovery to invest in what it calls Suzlon 2.0, a strategy aimed at transforming it from a wind turbine maker into a broader renewable energy solutions provider spanning wind, solar, battery energy storage systems and international markets.
The company is investing in new manufacturing capacity, technology platforms and prototypes, while also building a project development business. Analysts said these upfront investments, along with the higher EPC mix and geopolitical disruptions, have contributed to the near-term margin compression.
DevCo Engine
A key part of the strategy is the DevCo model, under which Suzlon plans to invest about `500 crore to acquire land, secure transmission connectivity and complete early-stage project development before partnering with customers for execution.
Kapoor said the model has already secured more than 600 MW of orders within four months. Suzlon aims to quadruple renewable sales to 10 GW and expand renewable energy assets to 70 GW by FY31. It is also evaluating opportunities in Europe, Australia, Latin America and Southeast Asia, while identifying a more than 20 GW serviceable solar asset base around its existing service locations.
Within wind, repowering could provide another significant opportunity. Kapoor estimates India’s repowering potential at nearly 25 GW, with a large part of the country’s installed fleet commissioned 10-20 years ago using smaller turbines and lower hub heights. Newer platforms can generate substantially more power from the same sites, making replacement of ageing turbines commercially attractive. Suzlon expects to secure confirmed repowering orders in India by the end of FY27 and is also looking at Europe and Australia.
The broader tender environment is also turning more favourable for wind. Solar had dominated renewable auctions earlier, but its share has declined as tenders increasingly seek round-the-clock and firm, dispatchable renewable power, often requiring wind as part of hybrid projects. Suzlon’s order inflows stood at about 1 GW in YTD-FY27, compared with 0.8 GW a year earlier, taking its order book to 6.1 GW. About 84% of the book comprises PSU and commercial and industrial orders, according to ICICI Securities.
The bigger question, however, is whether the market can grow fast enough to support Suzlon’s ambitions. Nuvama expects India’s wind industry could plateau at 8-10 GW over the next two-three years and estimates Suzlon’s annual execution may stabilise at around 3-3.5 GW in FY27-28. Its FY31 targets are therefore likely to be back-ended.