Suzlon Energy: A Bright Spot in Wind Energy Amidst Market Fluctuations

Suzlon Energy has experienced a notable surge of 6% over the last month, although the stock has faced challenges in 2025, dropping by 11% year-to-date. If you’re contemplating investment strategies for this stock, Motilal Oswal has come out with an optimistic Buy rating, setting a target price of Rs 70 per share. This forecast suggests a potential upside exceeding 21% within the next year, fueled by strong operational performance and an increase in earnings.

Valuations and Growth Potential of Suzlon Energy

Motilal Oswal notes that despite a general decline in valuations across the capital goods sector, Suzlon Energy remains competitively priced. They anticipate an estimated EPS CAGR of 63% from FY24 to FY27, which significantly outpaces its domestic competitors like ABB India (23%), Siemens (20%), Thermax (17%), and CG Power (26%). Internationally, even companies like SANY, with a 26% growth rate, fall short of Suzlon’s trajectory.

In terms of earnings, Suzlon is positioned favorably with a FY26E PEG ratio of 0.6x, much lower than peers such as Thermax (2.5x), ABB India (6x), and CG Power (1.9x). This indicates that the stock offers substantial growth potential at its current valuation.

Wind Energy: The Future Backbone of Renewable Energy in India

As the leading wind energy provider in India and a global player with an impressive 20.9 GW of installed capacity across 17 countries, Suzlon Energy is at the forefront of the renewable energy landscape. Their operations encompass the entire spectrum, including wind turbine generator (WTG) sales, project execution, and maintenance services.

According to Motilal Oswal’s analysis, wind energy is projected to constitute 20% of India’s renewable energy mix by 2030, which is still lower compared to 39% in the US and Germany, 33% in China, and 42% in the UK. This emphasizes the significant growth potential for wind energy in India. They also highlight that integrating wind energy with solar and storage can lower the levelized cost of energy (LCoE), making projects more economically viable.

Challenges Ahead for Suzlon Energy

While there is optimism surrounding Suzlon’s valuation, certain risks must be considered:

• Increasing competition from Chinese and European firms as wind installations grow.
• Possible pressure on margins for wind turbine generators.
• Dependence on ISTS waivers for favorable project economics.
• Technological advancements that could lead to product obsolescence.
• Potential delays in project execution, which could hinder order fulfillment.

Additionally, fluctuations in raw material prices and operational costs pose challenges that could limit the company’s growth potential.

In summary, while Suzlon Energy faces several challenges, its robust growth prospects and strategic positioning in the wind energy sector present a compelling opportunity for investors looking to tap into India’s renewable energy future.