Motilal Oswal has maintained a positive outlook on Suzlon Energy with a target price of Rs 65, citing a robust 5.9 GW order book and new growth segments. The brokerage's report arrives after a 31% correction in the stock price over the last three months, which has pressured investor sentiment. The company’s ability to ramp up execution in the second half of the fiscal year will be a critical monitorable for investors.
Motilal Oswal has reaffirmed its positive stance on Suzlon Energy, setting a target price of Rs 65 per share. This projection suggests a potential upside of approximately 71% from recent levels. The brokerage’s outlook is anchored in the company's strong revenue visibility, supported by a 5.9 gigawatt order backlog reported at the end of the first quarter of fiscal 2027.
The optimism from the brokerage is driven by three key growth areas: wind turbine repowering, export markets, and the development company model. The development company model, in particular, has seen rapid traction, securing over 600 megawatts of new orders in just the first four months of the 2027 fiscal year. This segment is becoming a primary revenue driver, now accounting for 60% of all new order inflows.
However, the brokerage report follows a period of significant volatility for the stock. Suzlon Energy has experienced a 31% correction in its share price over the past three months, a trend that reflects market concerns regarding margin pressures and the pace of execution. Investors have been cautious, balancing the company's large order book against risks such as rising operational costs and interest expenses that can impact profitability.
Looking at the financials, Suzlon is currently trading at approximately 17.5 times its estimated earnings per share for fiscal 2028. While this valuation is below the company's two-year forward historical average of 27 times, it reflects the market's current hesitation. Regulatory factors, such as the government’s Approved List of Models and Manufacturers for wind power, are expected to provide a buffer for domestic manufacturers like Suzlon by restricting cheaper imports and supporting local capacity building.
Management has indicated that the second half of the fiscal year is crucial, with expectations that it will contribute 60% to 65% of the total annual operating profit. The company is aiming to ramp up delivery volumes to 2.1 gigawatts in the second half, compared to 1.2 gigawatts in the first half.
Investors will now be closely watching whether the company can successfully convert this substantial backlog into actual deliveries without incurring significant cost overruns. The ability to maintain stable profit margins amid an evolving business mix—shifting more toward development projects—will be the key factor determining the stock’s performance in the coming quarters.