Suzlon Energy has delivered impressive returns to investors in the past, but the stock has recently been under pressure. After hitting an all-time high in September last year, the stock has been witnessing volatility and struggling to hold its ground.
On Thursday, Suzlon shares were trading 1% higher at ₹60. Over the past six months, the stock has delivered a modest 13% return, but on a one-year basis, it is down 25%. However, over the last three years, Suzlon has been a multibagger, delivering a staggering 700% return. This clearly indicates that while the long-term story has been rewarding, the past year’s performance has been disappointing.
Reasons Behind the Recent Decline
Market analysts have pointed out two key reasons for the recent correction in Suzlon shares:
CFO Resignation:
The resignation of Chief Financial Officer Himanshu Modi has been a major concern. Modi was not just a financial head but a critical architect of Suzlon’s turnaround, steering the company from a debt-ridden position back to profitability.Concerns Over EPC Mix:
A few brokerage houses have raised concerns regarding the company’s Engineering, Procurement, and Construction (EPC) mix. A decline in this segment has led to apprehensions about revenue realization.
Q1 FY26 Performance – Positive Growth Across Metrics
Despite the market concerns, Suzlon’s Q1 results for the current financial year have been strong:
Net Profit: Up 7% year-on-year to ₹324 crore.
Revenue: Jumped 54.6% year-on-year to ₹3,117 crore.
Operating Profit (EBITDA): Increased 64.1% to ₹63 crore.
EBITDA Margin: Improved from 18.2% to 19.3%.
Order Book: Robust at 5.7 GW.
The company has benefited from the government’s domestic sourcing policy, which mandates that most wind energy components be procured from within India. With a 40% market share in the wind energy segment, Suzlon enjoys a strong “home advantage.”
Brokerage Recommendations
Here’s how top brokerages view Suzlon Energy’s prospects:
Motilal Oswal: Buy with a target price of ₹80. They highlight record deliveries of 444 MW and the strong 5.7 GW order book. They also point to the potential 700 MW deal with Tata Power.
ICICI Securities: Buy with a target price of ₹70, citing the domestic sourcing mandate as a key growth driver.
JM Financial: Buy with a target price of ₹78. They expect operating leverage to push margins from 10% to 15%, noting Suzlon’s strength in the wind turbine generator segment, though they acknowledge installations are slightly lower compared to deliveries.
Nuvama: Hold with a target price of ₹67. They see the decline in EPC mix impacting realizations and consider the CFO’s resignation a short-term negative.
Investor Outlook – Short-Term Caution, Long-Term Potential
Brokerage views suggest that in the short term, Suzlon shares may continue to witness volatility due to the CFO exit and EPC mix concerns. However, long-term investors can remain optimistic, supported by a strong order book, operational growth, and policy tailwinds in the renewable energy sector.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
