Suzlon Energy Ltd is in focus after global brokerage UBS reiterated a positive view on the stock and set a target price of ₹72, implying an upside of about 22% from the previous close of ₹59.09.
During the day’s trade, the stock rose as much as 0.8% to ₹59.73, compared with its previous closing price of ₹59.20. Suzlon commands a market capitalisation of ₹81,479.24 crore.
UBS’ optimism is based on the company’s plans to broaden its renewable energy business and strengthen execution capabilities.
1. Expansion Beyond Wind Turbines
Suzlon is moving beyond its traditional wind turbine business and positioning itself as an integrated renewable energy platform.
Management aims to raise its share of the installed wind base to 40% over the next five years, up from 33% currently.
UBS believes a larger installed base could create recurring business opportunities and improve customer retention.
2. Asset-Light Entry Into Solar
Instead of investing heavily in manufacturing facilities, Suzlon plans to expand in solar energy through partnerships with manufacturers.
According to UBS, this strategy could:
- Keep capital expenditure under control.
- Reduce balance-sheet risk.
- Improve returns on invested capital.
- Allow participation in the solar opportunity without large investments.
3. Benefiting From India’s Renewable Energy Growth
India is expected to continue adding renewable energy capacity over the next decade.
UBS said Suzlon’s integrated approach could help the company capture a bigger share of project opportunities.
That, in turn, could support:
- Higher order inflows.
- Better revenue visibility.
- Stronger earnings growth.
4. EPC Model Supports Execution
The brokerage highlighted Suzlon’s Engineering, Procurement and Construction (EPC) model as another growth driver.
Managing a larger part of the project lifecycle gives the company greater control over:
- Project timelines.
- Costs.
- Quality standards.
UBS said this could reduce execution risks and provide more predictable revenue streams.
5. DevCo Strategy Could Lift Margins
Suzlon is also pursuing a Developer Company (DevCo) model, under which it develops wind projects and later transfers them to customers.
The brokerage expects the strategy to:
- Increase project control.
- Improve monetisation opportunities.
- Offer ready-to-operate assets to customers.
- Support higher margins over time.
Financial Performance
Suzlon reported revenue of ₹5,493 crore in Q4FY26, up 44.94% from ₹3,790 crore in the corresponding quarter of the previous year.
Net profit, however, declined to ₹1,114 crore from ₹1,181 crore a year earlier.
Key Financial Metrics
The company reported:
- ROCE: 35.1%
- ROE: 40.6%
- Debt-to-equity ratio: 0.06
- P/E ratio: 24.2
- Industry P/E: 35.8
- PEG ratio: 0.15
- Five-year profit CAGR: 45.7%
- Three-year average ROE: 39%
Global Presence
Founded in 1995 by the late Tulsi Tanti, Suzlon is headquartered at the One Earth campus in Pune.
The company has:
- More than 21,700 MW of installed wind energy capacity.
- Over 10,000 operational wind assets worldwide.
- More than 1,900 customers.
- Operations across 17 countries.
FY31 Growth Plan
Under its Suzlon 2.0 strategy, the company is targeting FY31 milestones that include:
- More than 40% market share in India’s wind EPC segment.
- More than 60% share of India’s wind business.
- Renewable energy assets under management of over 70 GW.
- Revenue growth of more than 25% CAGR.
Suzlon also plans to expand:
- Order book from 5.5 GW to about 15 GW.
- Renewable energy sales from 2.5 GW to 10 GW.
- RE assets under management from 18 GW to around 70 GW.
TL;DR:
UBS has set a ₹72 target for Suzlon Energy, implying around 22% upside. The brokerage is positive on the company’s shift towards an integrated renewable energy platform, asset-light solar strategy, EPC execution model and DevCo approach.
AI summary:
- UBS has assigned a ₹72 target to Suzlon Energy.
- The target implies about 22% upside.
- The brokerage highlighted five growth drivers for the company.
- Q4FY26 revenue rose 44.94%, while profit declined slightly.
- Suzlon aims to expand its wind and renewable energy business by FY31.
