Suzlon Energy is likely to benefit from regulatory tailwinds mandating local content, a robust order book providing strong revenue visibility, and execution improvements through proactive land acquisition and engineering, procurement and construction expansion initiatives, believes the brokerage. Motilal Oswal noted that Suzlon Energy's stock price has corrected 31% over the past three months and is currently trading at 17.5x FY28E EPS, a 20% discount to its one-year fwd mean -1SD of 22 times.
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Motilal Oswal Report
Shares of Suzlon Energy Ltd.'s are likey to remain in focus as Motilal Oswal has reiterated its 'Buy' rating on the stock and has set a target price of Rs 65, based on 30 times FY28E earnings per share, a slight premium to its historical average two-year fwd P/E of 27x, implying a potential upside of 71% from the reports current market price of Rs 38.
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The wind energy service provider is likely to benefit from regulatory tailwinds mandating local content (ALMM for wind), a robust order book providing strong revenue visibility, and execution improvements through proactive land acquisition and EPC expansion initiatives, believes the brokerage.
Motilal Oswal noted that Suzlon Energy's stock price has corrected 31% over the past three months and is currently trading at 17.5x FY28E EPS, a 20% discount to its one-year fwd mean -1SD of 22x.
Given the seasonal nature of earnings with H2 typically contributing 60-65% of annual Ebitda, the brokerage expect earnings momentum to strengthen in H2 FY27 as deliveries are expected to rise to 2.1GW from estimate of 1.2GW in H1.
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Strong order book and earnings growth outlook:
The company's order book stood at 5.9GW as of Q1 FY27-end (~1.3GW of order inflows in FY27YTD), providing 100% visibility on the brokerage's estimated deliveries through Q3 FY28. Motilal Oswal estimates Suzlon Energy to deliver Ebitda compound annual growth rate of 22% over FY26-28E.
Repowering, exports and DevCo are the three new growth engines of Suzlon Energy believes Motilal Oswal, where DevCo model has gained strong traction, with 600MW+ of orders booked within four months of FY27, accounting for 60% of total orders.
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