Suzlon Energy Ltd. shares are under investor scrutiny after the renewable energy solutions provider reported a 6% drop in net profit to Rs 1,114 crore for the March quarter. This decline occurred despite robust sales growth, primarily attributed to increased 'other expenses' impacting the bottom line.
Following the Q4 earnings announcement, several prominent brokerages have updated their target prices for Suzlon Energy shares, largely converging within the Rs 55-75 range.
Brokerage Outlook on Suzlon Energy
- Centrum Broking has set a target price of Rs 75, maintaining a 'Buy' rating.
- UBS and Investec both suggested targets of Rs 72, also retaining 'Buy' recommendations.
- ICICI Securities, JM Financial, and MOFSL (Motilal Oswal Financial Services) reaffirmed their 'Buy' calls with target prices of Rs 65 each.
- Axis Capital reportedly proposed a target of Rs 64.46.
- Ambit Capital suggested a target of Rs 60.
- Nuvama pegged the stock's target price at Rs 55 per share, downgrading its recommendation to 'HOLD'.
Analyst Insights and Rationales
Centrum Broking expressed confidence in Suzlon's strategic positioning, anticipating sustained improvements in profitability and cash flow generation. This outlook is supported by accelerating wind capacity additions in India and the scaling of service revenues in tandem with the installed base. Centrum highlighted Suzlon's strong execution momentum, expanding manufacturing capabilities, high-margin service annuity base, and favorable policy environment as key factors benefiting the company amid India's renewable energy transition. They view Suzlon as transitioning from a turnaround narrative to a structural growth platform, further bolstered by a net cash balance sheet and improved working capital discipline.
Conversely, Nuvama adopted a more cautious stance, noting that Suzlon Energy's Q4 execution of 830MW fell short of their 875MW estimate, with an EBITDA margin of 17.5% slightly below their 17.7% projection. While profit remained in line, aided by Deferred Tax Asset (DTA) adjustments, management cited working capital strain due to public sector undertaking (PSU) order execution and delayed commissioning. Nuvama also pointed out management's non-committal stance on execution growth over the next two years, although scale-up is expected through an improved EPC mix and export opportunities. Nuvama anticipates additional DTA creation of Rs 3,000–3,500 crore from past losses but has cut FY27E/28E EPS by 2-4% due to increased interest costs from working capital strain, leading to their 'HOLD' downgrade.
MOFSL observed that Suzlon's Q4 revenue missed their estimate by 7% and EBITDA by 5%, but profit exceeded expectations by 20%. The company successfully met its FY26 guidance of 60% year-on-year growth across key performance indicators, with new orders and execution identified as primary drivers for FY27.