Motilal Oswal has given a “Purchase” score and sees an upside potential of 24% from Thursday’s closing value on the BSE.
“SUEL stands to learn from regulatory tailwinds mandating native content material, a strong order e-book offering robust income visibility, and execution enhancements by proactive land acquisition and EPC growth initiatives,” the brokerage mentioned in a observe.
The Revised Listing of Fashions and Producers (RLMM) notification mandating native content material in wind generators is anticipated to be formally adopted in Q2FY26. Whereas builders have sought as much as a 12 months for implementation, coverage intent stays agency.
Motilal Oswal believes this could possibly be a tailwind for Suzlon Power.
Moreover, the corporate’s order outlook stays robust, with potential NTPC awards of 1.5 GW anticipated quickly. FY26 whole orders are estimated at 4 GW, which may increase the order e-book to six.5 GW — surpassing the earlier peak of 5.6 GW.Nonetheless, the brokerage flagged execution as a seamless problem within the wind sector, with FY25 capability additions at 4.2 GW, nonetheless under the 5.5 GW peak in FY17. That mentioned, bigger turbine sizes and the growth of initiatives throughout extra states may assist exceed previous data.OEMs are enjoying a extra lively EPC function as their financials enhance, with early land acquisition changing into extra widespread. The shift to a land lease mannequin and the phasing out of ISTS waivers also needs to ease execution bottlenecks. For Suzlon, the EPC share within the order e-book is anticipated to rise from 20% to 50% within the medium time period, enhancing execution visibility.
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Suzlon’s money conversion cycle (CCC) can be projected to enhance by 30–35 days over the subsequent few years, aiding free money movement technology. This enchancment will probably be pushed by slower progress, higher stock management from rising EPC share, and stronger provider bargaining energy.
From 2HFY27 onwards, the corporate can also use extra debt to fulfill working capital wants, bettering steadiness sheet effectivity and sustaining return on fairness (RoE).
Given this outlook, Motilal Oswal has utilized a goal P/E of 35x to FY27E EPS — a slight premium to its historic two-year ahead P/E common of 27x — as execution and earnings momentum are solely starting to select up for Suzlon Power.
As of midday at this time, shares of Suzlon Power have been buying and selling 0.7% decrease at Rs 65.51 on BSE.
(Disclaimer: Suggestions, options, views and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions)
