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ICICI Securities Report
Suzlon Energy Ltd. is back in shape after a tumultuous period over the last decade. Over the past three years, the company has pared its debt from Rs 12,000 crore in FY20 through various debt to equity conversions. With that, it became net cash positive with a cash reserve of Rs 1,300 crore, as of Sep'24, after a successful equity raise worth Rs 2,000 crore in Q2 FY24 for debt reduction. Since then, Suzlon has improved its cash position significantly.
Moreover, major positive changes in regulatory policy and eventually on business front bode well for the wind industry. The government has decided to tender out at least 10GW of wind capacity every year with pick-up in demand from commercial and industrial entities for round-the-clock power supply. Suzlon, being the market leader in the wind turbine industry, is the natural beneficiary of this shift, in the brokerage's view.
Outlook for wind industry is positive over medium to long term, given India's RE and wind capacity targets. Also, given the increasing complexity of RE power projects (from plain vanilla solar or wind to hybrid, RTC and FDRE), we believe wind may play a crucial role in RE generation going ahead.
The company's order book, as of Jan'26, stood at ~6.4GW, which is 4.1x its FY25 wind turbine delivery volume. Thus, owing to strong order backlog of 6.4GW and positive outlook for order inflow given India's RE targets, the brokerage remain positive on the stock.
ICICI Securities maintains Buy, with a revised target price of Rs 65 (Rs 76 earlier), valuing the business at 32x FY28E EPS (40x FY27E EPS earlier). The brokerage have slightly revised its estimates based on 9MFY26 performance.
Key risks: Any surprise in WTG execution and OI; any delay in execution.
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