Geojit downgrades Suzlon Energy shares after 55% rise in 2 months; stock falls 8% in June

Shares of Suzlon Energy have tumbled 8% in June so far, after it witnessed a sharp rally of 55% in the last two months from its 52-week low at Rs 46 hit in early April 2025. The stock fell 2.5% to Rs 65.87 on Thursday, commanding a total market capitalization of Rs 90,000 crore.

Geojit Financial Services has downgraded its rating on Suzlon's stock to 'Accumulate' from 'Buy' but has pushed its target price higher. Geojit cited the company's promising order book of over 5.5 GW and projected a 41% compound annual growth rate in WTG deliveries from FY25 to FY27. Despite acknowledging potential execution risks,

Geojit expects Suzlon's earnings to grow at a 38% CAGR during this period, with a return on equity projected to rise to 26%. Geojit has increased its target price to Rs 77 (from Rs 71 earlier), signaling a 17 per cent upside from day's low at Rs 65.87.

Suzlon Energy, a leading wind turbine manufacturer, witnessed a 73% increase in its consolidated revenues for Q4FY25, attributed to robust growth in the wind turbine generator (WTG) business, which saw a 105% year-on-year surge. The company delivered 573MW during the quarter, marking a 110% increase from the previous year.

Gross margins for Suzlon declined by 133 basis points year-on-year, settling at 35% due to a higher share of the WTG business. However, the company's EBITDA margins improved by 202 basis points to 18%, driven by significant deliveries in the WTG segment, contributing to greater operational leverage.

Suzlon's EBIT margin in the WTG and foundry segments improved by 903 and 34 basis points, respectively, while the operations and maintenance services segment experienced a decline of 1,272 basis points in EBIT margin, dropping to 26.3% year-on-year.

As of FY25, Suzlon reported a profit before tax increase of 118% to Rs. 551 crore, buoyed by deferred tax asset recognition of Rs. 600 crore, which led to a profit after tax surge of 365% to Rs. 1,181 crore. The company's net cash position stands at Rs. 1,943 crore, with a consolidated net worth of Rs. 6,106 crore, underscoring its strong financial footing.

Suzlon has witnessed a mild correction from its recent high at the current juncture and is now trading near the Rs 68 mark. The RSI on the hourly chart appears overbought, indicating potential exhaustion, said Jigar S Patel, Technical Research Analyst at Anand Rathi Shares & Stock Brokers.

"If this momentum fades further, it may reflect RSI exhaustion on the daily timeframe as well. Given this setup, it is advisable to lock in profits on any meaningful bounce rather than chasing the rally. A healthy correction towards the Rs 60 zone could offer a better re-entry opportunity with improved risk-reward, once indicators reset and price stabilizes," he said.