Suzlon Energy Ltd. has received a 'buy' rating from Motilal Oswal Financial Services Ltd. as the brokerage reinitiated coverage on the stock, with a target price of Rs 82. The brokerage projects a 24% upside in the stock from current levels.
The target implies a price to earnings of 35 times to FY27E EPS. "This is at a slight premium to its historical average two-year forward price to earnings of 27 times, given execution and earnings are just picking up for Suzlon Energy," it added.
Shares of Suzlon have gained over 24.32% in the past three months. During this period, the scrip had hit a low of Rs 52.67 on May 9, before it advanced to a high of Rs 65.85 on July 11.
Suzlon reported a nearly five-fold jump in consolidated net profit to Rs 1,181 crore, up from Rs 254 crore a year earlier for the March quarter. Its total income rose to Rs 3,825.19 crore from Rs 2,207.43 crore during the same period, according to exchange filing.
The company stands to benefit from regulatory tailwinds mandating local content, a robust order book providing strong revenue visibility, and execution improvements through proactive land acquisition and EPC expansion initiatives.
The brokerage's positive outlook is driven by expected adoption of the Revised List of Models and Manufacturers local content draft notification by second quarter of fiscal 2026, healthy order prospects, including approximately 1.5GW NTPC orders, where Suzlon Energy is a strong contender.
The brokerage is modeling total new orders of approximately 4GW for Suzlon Energy in FY26, implying a robust closing order book to approximately 6.5 GW.
The other reasons for positive outlook are gradual phase-out of the ISTS waiver over the next four years, which should help to reduce congestion in certain states, supporting smoother project execution and an increase in EPC share in the order book to approximately 50%, thus improving execution visibility.
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