Suzlon Energy Ltd. has experienced significant share price target reductions from multiple brokerages, including UBS, Investec, Axis Capital, and Ambit Capital, after reporting first-quarter results that fell short of market expectations. The company's shares plunged 10 percent in the previous trading session following the announcement.
The target cuts reflect Suzlon's Q1 execution of 506 MW and an Ebitda margin of 15.5 percent, which led to a profit-after-tax (PAT) miss for the quarter.
Revised Share Price Targets
- UBS: Analyst Amit Mahawar lowered his target to Rs 66 from Rs 72, while maintaining a 'Buy' rating.
- Investec: Anuj Upadhyay reduced his target to Rs 67 from Rs 72, also retaining a 'Buy' recommendation.
- Ambit Capital: Cut its target to Rs 59 from Rs 62.
- Axis Capital: Sumit Kishore retained a 'Buy' call but lowered the target to Rs 63 from Rs 75.
- Nuvama Institutional Equities: Issued the lowest target at Rs 51 (down from Rs 56), with a 'Hold' recommendation after previously dropping coverage.
- Centrum Broking: Revised its target slightly to Rs 74 from Rs 75, holding the highest target among current analyst updates.
Factors Behind Q1 Performance
Analysts attributed the decline in Suzlon's Ebitda margin primarily to a higher EPC (Engineering, Procurement, and Construction) revenue mix, temporary disruptions in the supply chain, and strategic investments made under the 'Suzlon 2.0' initiative. The management acknowledged a 10–20 percent shortfall in execution, citing temporary logistical challenges stemming from geopolitical situations, certain strategic investments, and changes in scope and segment mix. Despite this, the company maintained its target Ebitda margin band of 17–18 percent.
Analyst Outlook and Future Prospects
Centrum Broking expressed optimism, stating that margins are expected to improve as deferred deliveries recover, operating leverage increases, and the high-margin Operations & Maintenance (O&M) business contributes more significantly. They highlighted Suzlon's strong position to capitalize on India's accelerating wind energy sector, supported by a robust order pipeline, enhanced execution visibility, and favorable policy support.
“Growth is expected to be driven by expanding manufacturing capacity, the high-margin O&M business, and Suzlon 2.0 initiatives—including higher-capacity turbines, DevCo, repowering, and exports—while its net cash balance sheet and disciplined working capital management provide strong financial flexibility to support sustained earnings growth,” Centrum Broking noted.
Conversely, Nuvama Institutional Equities adopted a more cautious stance, cutting its FY27/28E EPS by 13 percent and 10 percent respectively, due to adjustments in margin, increased depreciation, and higher interest costs. Nuvama expects Suzlon to create additional Deferred Tax Assets (DTA) of Rs 3,000–3,500 crore from past losses.