Motilal Oswal Projects 73% Upside for Suzlon Energy Shares
Motilal Oswal maintains a buy rating on Suzlon Energy, forecasting a target price of ₹65, indicating a potential 73% increase.
Motilal Oswal sets a target price of ₹65 for Suzlon Energy shares.
The company's order book stands at 5.9 GW, ensuring earnings visibility.
Analysts expect a significant growth in wind capacity additions in the upcoming months.
Motilal Oswal has reaffirmed its buy recommendation for Suzlon Energy, projecting a target price of ₹65, which translates to a potential upside of 73% from the current trading levels. This forecast was detailed in a note released on October 12, highlighting the stock's attractive valuation and strong order book as key factors driving this optimistic outlook.
The brokerage noted that Suzlon's shares have experienced a correction of 31% over the last three months, currently trading at a price-to-earnings ratio of 17.5 times its estimated earnings for the financial year 2028. This valuation is approximately 20% lower than the one-year forward mean, indicating a favorable buying opportunity. Motilal Oswal emphasized that the second half of the financial year typically accounts for 60% to 65% of the company's annual earnings, suggesting a potential rebound in performance as deliveries are expected to increase significantly.
As of the end of June, Suzlon Energy's order book was robust at 5.9 GW, providing full visibility for delivery estimates through the third quarter of financial year 2028. The brokerage anticipates that the company's EBITDA will grow at a compounded annual growth rate of 22% from financial year 2026 to 2028, driven by this strong order pipeline.
Furthermore, the report highlighted the increasing wind capacity additions in India, with 3 GW added in the first half of the current financial year. Historically, the second half has seen installations 1.5 times greater than the first half, suggesting an additional 4.5 GW could be added, aligning with government expectations. The rising demand for power, particularly during evening peak hours, is expected to further support the deployment of wind energy projects.
Looking ahead, Motilal Oswal identified three new growth engines for Suzlon, including a successful DevCo model and international expansion opportunities in markets such as Europe and Australia. With a significant portion of India's existing wind fleet due for repowering, Suzlon is poised to capitalize on these developments. Analysts remain optimistic, with 10 out of 12 covering analysts rating the stock as a buy, reflecting a consensus that suggests a 67% upside potential from current levels. On the trading front, Suzlon Energy shares rose by 3.2% to ₹37.6, ending a two-day decline, although the stock remains down 28% year-to-date.
