Suzlon Energy has rallied 6 per cent in last 1 month but the share price is down 11% in 2025 so far. In case, you are wondering what’s the best strategy for the stock, Motilal Oswal has initiated coverage with a Buy rating and a target price of Rs 70 per share. That implies an upside of over 21% in next 12 months. The recommendation is on the back of healthy execution and earnings pickup.
According to Motilal Oswal, “while valuations across the capital goods space have come off, they remain elevated given a healthy earnings growth trajectory, a decent order book, improving cash flows, and a positive industry outlook.”
Motilal Oswal On Suzlon Energy: Valuations reasonable
Motilal Oswal highlighted that Suzlon Energy, at current levels, “is reasonably priced, given an estimated EPS CAGR of 63% over FY24-27, significantly surpassing domestic capital goods peers ABB India (23%), Siemens (20%), Thermax (17%), and CG Power (26%) and global peers such as SANY (26%).”
Even on the earnings front, Motilal Oswal pointed out that Suzlon “is trading favorably at FY26E PEG ratio of 0.6x, below other domestic capital goods peers such as Thermax (2.5x), ABB India (6x), and CG Power (1.9x).”
Motilal Oswal On Suzlon Energy: Wind Energy to play critical role
Suzlon Energy is India’s top wind energy provider and a global leader in wind energy with an installed capacity of 20.9GW across 17 countries. Its operations span across wind turbine generator (WTG) sales, project execution, foundry and forging components, and operation and maintenance (O&M) services.
Motilal Oswal calculations indicated that By 2030, wind energy is expected to account for 20% of India’s renewable energy (RE) mix Vs 39% in the US and Germany, 33% in China, and 42% in the UK, highlighting the need for more focus on wind energy development. Given, “Wind energy’s critical role in India’s renewable future and India’s relatively lower wind energy penetration offers significant room for growth,” added Motilal Oswal.
Though there are concerns that a combination of solar energy and storage solutions may replace wind energy, ReNew, a leading RE firm in India, estimates that adding wind energy to solar and storage solutions can reduce the levelized cost of energy (LCoE) by Rs 2- 0.3/kWh and lead to 1% higher project IRR.
Motilal Oswal On Suzlon Energy: Key risks
Though Motilal Oswal considers the valuations as attractive at current levels, they highlighted some key risks for the company. These include
-Rising competition from Chinese and European players as wind installations pick up
-Potential pressure on realizations/ margins for wind turbine generators (WTGs)
-Dependency on ISTS waiver for project economics
-Technological changes leading to product obsolescence
-Delays in project execution leading to slower-than-expected execution of order book
That apart, Motilal Oswal also pointed out that the volatility in raw material prices, operational and overhead costs are other primary concerns that could limit the upside potentially.