Market leader Suzlon Energy Ltd stock to buy now for an upside potential of more than 20%; Do you own it?
Suzlon Energy Ltd : India’s wind energy sector is on a rapid growth trajectory, and one company at the center of this revolution is Suzlon Energy Ltd. With a 31% market share, Suzlon is a dominant player in the wind energy space, offering significant upside potential for investors. Brokerage firm Motilal Oswal has given a ‘Buy’ call on the stock, setting a target price of ₹70 per share, which signals a potential 22% upside from the current levels.
With a growing order book, increasing execution capacity, and strong financials, Suzlon appears well-positioned to benefit from India’s clean energy ambitions. Let’s dive deeper into why this market leader stock could be a great buy right now.
India’s Wind Energy Boom: A Strong Tailwind for Suzlon
India ranks fourth globally in wind energy, with an installed capacity of 48.16 GW as of FY24, and the sector is expected to reach 89.49 GW by FY30 at a CAGR of 11.26%. Wind energy already contributes 10% of India’s total power generation, with 71.814 TWh produced in FY23.
Suzlon, being a major wind turbine manufacturer and energy solutions provider, is well-placed to capitalize on this rapid growth. The company’s order execution is projected to rise from 710 MW in FY24 to 3.2 GW in FY27, reducing costs and boosting margins.
Price Movement & Market Cap
- Market Cap: ₹78,723.90 crore
- Current Price: ₹57.66 per share
- Previous Closing Price: ₹57.62 per share
Suzlon’s stock has been steadily gaining momentum, and Motilal Oswal’s ₹70 target suggests further potential upside of 22%.
Why is Suzlon a Strong Buy?
1. Favorable Valuation & Profit Growth
Motilal Oswal estimates a 63% CAGR in PAT over FY24-27. The stock trades at a FY26E PEG ratio of just 0.6x, making it attractively valued compared to its industry peers.
2. Strong Order Book & Execution Capacity
Suzlon’s order book is 80% non-EPC (Engineering, Procurement, and Construction), focusing on contracts with partial land availability for smoother execution. The company has secured large orders from NTPC, Jindal Renewables, and Torrent Power.
3. Expanding Manufacturing Capacity
Suzlon has expanded its production capacity to over 4.5 GW with upgraded facilities in Pondicherry, Madhya Pradesh, and Rajasthan. The new S144 model has a robust 5 GW order book, with 85% of components sourced domestically under the “Made in India” initiative.
4. Record Execution & Delivery
The company achieved a record delivery of 447 MW in Q3 FY24, marking a 163% YoY increase. It has already surpassed FY24’s total 710 MW execution in just nine months.
5. Strategic Initiatives & Global Expansion
- Suzlon is a UN Global Compact member and aligns with the Net Zero by 2050 goal.
- It is exploring export opportunities to maximize capacity utilization beyond the Indian market.
- Plans to diversify with 1,100 MW in advanced project development contracts.
Financial Ratios of Suzlon Energy
| Metric | Value |
|---|---|
| Market Cap | ₹78,723.90 crore |
| Current Price | ₹57.66 per share |
| Target Price | ₹70 per share |
| Expected Upside | 22% |
| PAT CAGR (FY24-27) | 63% |
| PEG Ratio (FY26E) | 0.6x |
| Manufacturing Capacity | 4.5 GW |
| Order Execution (FY27) | 3.2 GW |
| Wind Energy Contribution (India) | 10% |
| Global Installed Capacity | 20.8 GW |
Margin & Profitability Outlook
Suzlon expects:
- 20% contribution margins (adjusted for steel prices and project execution).
- 40% O&M margins, although quarterly fluctuations may occur.
These margins, combined with increased capacity utilization, will significantly enhance profitability.
Should You Buy Suzlon Energy Stock Now?
Suzlon’s dominant market position, strong order book, growing manufacturing capacity, and strategic focus on renewables make it a compelling investment. The brokerage recommendation from Motilal Oswal reinforces the upside potential, making Suzlon an attractive buy for investors looking at the clean energy sector.
Q&A: Quick Insights on Suzlon Energy
Q1: Why is Suzlon Energy stock a good buy now?
A: Suzlon is India’s market leader in wind energy with a 31% market share, a growing order book, and strong financial growth. With Motilal Oswal’s ₹70 target, the stock has a 22% upside potential.
Q2: How is Suzlon benefiting from India’s renewable energy push?
A: India’s wind energy capacity is expected to double by 2030, and Suzlon’s execution capacity is set to grow to 3.2 GW by FY27, ensuring strong revenue and margin growth.
Q3: What are Suzlon’s financial growth projections?
A: The company is expected to achieve a 63% PAT CAGR (FY24-27) and trades at an attractive 0.6x PEG ratio (FY26E), making it undervalued compared to peers.
Q4: What is Suzlon’s manufacturing capacity and order book size?
A: Suzlon has expanded its manufacturing capacity to 4.5 GW and has a 5 GW order book for its latest S144 model wind turbines.
Q5: What risks should investors be aware of?
A: While Suzlon has strong growth potential, investors should monitor transmission delays, land acquisition challenges, and raw material price fluctuations, which could impact execution timelines.
Final Thoughts
Suzlon Energy is a market leader in India’s wind energy sector, with strong growth potential and a promising financial outlook. With India’s renewable energy focus and wind energy expansion, Suzlon is well-positioned for long-term growth.
If you’re looking for a high-growth clean energy stock, Suzlon Energy could be the perfect pick for your portfolio.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.