Suzlon Energy Expands EPC Business to Sustain Growth, Aims to Double Share by FY28

Suzlon Energy is undertaking a significant expansion of its Engineering, Procurement, and Construction (EPC) business segment. This strategic move aims to maintain its robust growth trajectory and mitigate project execution delays that often stem from clients' challenges in land acquisition. The company has set an ambitious target to increase the contribution of its EPC business to its overall order book from the present 20% to 50% by the fiscal year 2028. To achieve this, Suzlon has initiated the process of acquiring land in advance across six key states with favorable wind conditions. The company has earmarked a seed capital of ₹150-160 crore specifically for these land acquisition efforts.

Suzlon Energy reported strong financial results for the quarter ending September, with net sales surging by 84% year-on-year to ₹3,870.78 crore. The company's net profit saw a remarkable increase of over five times, reaching ₹1,279.44 crore from ₹200.20 crore in the same period last year. Building on this performance, Suzlon has provided guidance for continued growth, expecting a further 60% increase in FY26, following a doubling of growth between FY24 and FY25.

By controlling the EPC aspects of projects, Suzlon aims to gain greater project management control, improve profit margins, and accelerate execution speed, thereby enhancing its competitive edge. Its subsidiary, SEForge, which focuses on manufacturing castings and forgings, has also demonstrated a significant turnaround, with revenues up by 40-50% year-on-year and improved margins due to cost optimization and increased machining capacity.

Furthermore, Suzlon's Chief Executive Officer, J P Chalasani, expressed optimism about India's potential to become a global manufacturing hub for wind energy components. This vision is supported by increasing domestic demand, favorable policy reforms such as GST rate adjustments, import monitoring norms, and incentives under ALMM and SOP frameworks, coupled with growing demand from sectors like data centers and green hydrogen.

Impact This proactive expansion strategy and the robust financial performance are highly positive indicators for Suzlon Energy. Investors are likely to view the company's efforts to gain more control over project execution and mitigate common delays favorably. The focus on EPC expansion, coupled with strong subsidiary performance and favorable market conditions, positions Suzlon for sustained growth and potentially higher profitability. The company's role in establishing India as a wind energy manufacturing hub also adds to its strategic importance. Rating: 9/10

Heading: Definitions Engineering, Procurement, and Construction (EPC): A comprehensive contract model where a single entity handles all phases of a project, from initial design and engineering to sourcing materials and equipment, and finally, the construction and commissioning of the project. Order Book: The total value of contracts awarded to a company that have not yet been completed. It represents future revenue potential. Fiscal Year (FY): A 12-month period used for financial reporting and accounting purposes. FY28 refers to the fiscal year ending in 2028. Gigawatt (GW): A unit of power measurement, equivalent to one billion watts. It is commonly used to express the capacity of electricity generation facilities. Seed Capital: The initial funding or investment provided to start a new business venture or project. Subsidiary: A company that is owned or controlled by another, larger company, known as the parent company. GST (Goods and Services Tax): A comprehensive indirect tax levied on the supply of goods and services in India. ALMM (Approved List of Models and Manufacturers): A list maintained by the government that specifies the eligible models and manufacturers of solar power equipment for use in grid-connected projects. SOP (Standard Operating Procedure): A detailed set of instructions designed to guide workers in performing routine tasks consistently and efficiently.