Suzlon Energy shares slide 10% to hit 52-week low after Q2 earnings; what's weighing on the stock?

Shares of Suzlon Energy Ltd plunged 9.73 per cent in Friday's trade to hit a 52-week low of Rs 33.21, following the renewable energy solutions provider's announcement of its second quarter (Q2 FY27) results after market hours on Thursday. The stock was last seen trading 8.81 per cent lower at Rs 33.55. At this level, it has declined 39.71 per cent over the past six months.

A key concern flagged by select brokerages was the decline in operating profitability. JM Financial stated that Suzlon's EBITDA margin declined to 15 per cent in Q2 FY27 from 18.6 per cent in the corresponding quarter last year, primarily due to a higher Engineering, Procurement and Construction (EPC) mix.

The brokerage also said the company's margins and growth prospects could face pressure from FY28 onwards. "In line with management guidance, we are reducing FY27E/28E/29E EBITDA margin to 15 per cent/16 per cent/15 per cent. We believe margins and growth prospects for Suzlon would be under pressure FY28 onwards due to limited India market (7–8 GW pa) and increasing competition (15–20 GW industry capacity), not to mention growing pains of a single-product company," it stated.

JM Financial downgraded the stock to 'Add' from 'Buy' and cut its target price to Rs 40 from Rs 46, valuing the company at 12 times September 2028 estimated EBITDA.

However, the brokerage also highlighted the company's topline growth. Suzlon reported Q2 FY27 revenue of Rs 4,900 crore, up 26 per cent year-on-year (YoY), broadly in line with JM Financial's estimates.

Wind turbine generator (WTG) deliveries increased to 710 MW from 565 MW in Q2 FY26, while installations nearly trebled to 454 MW from 153 MW in the year-ago quarter. The company's order book stood at 6 GW, with EPC accounting for 38 per cent, compared with 32 per cent in Q1 FY27. Management is targeting an EPC share of 50 per cent by FY28.

JM Financial expects Suzlon's deliveries to reach 3 GW in FY27, 3.3 GW in FY28 and 3.5 GW in FY29.

Separately, Nuvama Institutional Equities also noted that Suzlon's EBITDA margin came in below expectations in Q2 FY27. The brokerage retained its 'Hold' rating but lowered its 12-month target price.

"We are cutting FY27/28E EPS (9 per cent/7 per cent) and introducing FY29E as we tweak margins to reflect EPC-led costs jumps. Retain 'HOLD' with a TP of Rs 41 (from Rs 51) on 20x FY29E (WTG + F&F EPS) plus DCF of O&M (30x on FY28E EPS earlier)," Nuvama said.

Meanwhile, Motilal Oswal Financial Services Ltd (MOFSL) has maintained its 'Buy' call on Suzlon with a target price of Rs 65.

Technical view

According to AR Ramachandran, Sebi-registered research analyst at Tips2trades, "Suzlon is bearish and oversold on daily charts, with the next support at Rs 32.46. Investors holding short positions should keep booking profits or buy only if a daily close is above the resistance of Rs 36.1 for a potential upside target of Rs 41.2 in the near term."

Jigar S Patel, Senior Manager – Technical Research at Anand Rathi, also shared a bearish view on the counter. "Support is placed at Rs 32, while resistance is seen near Rs 36. A decisive move above Rs 36 could trigger further upside towards Rs 38. The stock is expected to trade within the Rs 32-38 range in the short term," he stated.