Suzlon Energy shares: JM Financial cut target price; check Q2 reviews; challenges & more

Suzlon Energy continues to attract positive reviews from brokerage firms but a few names have trimmed their target price on the stock. JM Financial has revised its price target on Suzlon, reducing it by 15 per cent over the previous one. However, it still sees 22 per cent upside in the stock. Analysts, tracking the counter, see a muted set of numbers on a sequential basis in Q2FY26.

Localisation of wind energy components and data centres will give a level playing field to Indian manufacturers. Solar+BESS projects are partially substituting wind in hybrid RE projects, but a complete replacement is unlikely, said JM Financial. "The large and continued ordering of wind turbine generators by experienced energy majors like JSW Energy, NTPC, Tata Power and Torrent Power strengthens our belief," it said.

The skewed growth of RE towards solar is risking grid stability and financial viability of projects, with rising incidences of zero tariff and curtailment. Currently, Solar+BESS is gaining a disproportionate share in tendering at the cost of wind. A recalibration in India’s RE strategy very soon and pickup in tendering of projects with wind as a component, JM noted.

"But execution bottlenecks (connectivity, land, RoW) remain a critical constraint in scale-up of wind energy, which, we believe, will limit the annual installations to 7-8GW. Suzlon is likely to struggle in maintaining growth momentum from FY28 in the absence of scalable diversification," added the domestic brokerage firm.

Nuvama Institutional Equities expects Suzlon to report a revenue of Rs 2,915.9 crore, up 38.63 per cent YoY but down 6.89 per cent QoQ. Ebitda is seen at Rs 470.9 crore, up 60 per cent YoY but down 21.39 per cent QoQ, with Ebitda margin coming at Rs 16.2 per cent. Net profit is penciled at Rs 257.5 crore, up 28.38 per cent YoY but down 20.60 per cent QoQ,

"We estimate execution of 375MW in Q2FY26 affected by heavy rains during the quarter while we anticipate Q2 margins to be sedate at 16 per cent (more EPC-related work). Execution ramp up and margin (due to fluctuations in EPC mix) remain key monitorables going forward," said Nuvama, which has a 'hold' rating on the stock.

Shares of Suzlon Energy dropped nearly a per cent to Rs 53.75 on Monday, compared to its previous close at Rs 54.29. The total market capitalization of Suzlon Energy slipped below Rs 74,000 crore. The stock has slipped 30 per cent below its 52-week high at Rs 76.09, hit a year ago.

JM Financial said, "We revise our target price from Rs 78 based on 35 times FY27 EPS to Rs 66 based on 25 times FY28, considering execution of 2.5GW/3.1GW/3.5GW during FY26/FY27/FY28. We maintain 'BUY'," it added, suggesting more than 22 per cent upside in the stock.

Motilal Oswal Financial Services (MOFSL) expects Suzlon to clock a 1 per cent fall in profit on YoY basis, despite a 32 per cent jump in sales. MOFSL sees a 32 per cent YoY growth in sales at Rs 2,785.20 crore, as it cited the execution of 365MW of wind turbine orders in Q2, up 42 per cent YoY, but down 18 per cent QoQ. MOFSL retained 'Buy' and a target of Rs 80 on Suzlon.

With a robust Q1FY26 exit order book of 5.7 GW, the current execution pace provides clear revenue visibility for the next three years, underpinning a projected 42 per cent CAGR in revenue over FY25–27E. As utilization rises in the WTG segment and the forging & foundry businesses, Suzlon is positioned to realize volume-driven efficiencies, supporting an expected 117 bps margin expansion, said Geojit Financial.

"Earnings are projected to grow at a strong 43 per cent CAGR, driven by improved asset turnover and rising profitability. ROE is expected to reach 27.1 per cent by FY27E, setting the stage for a potential valuation re-rating. At 29 times, the stock remains attractively priced, leaving significant upside potential," it added.

"Q2 deliveries are expected to have moderated vs Q1, as monsoon-related disruptions affect project execution and commissioning. Major orders during the quarter - NTPC’s 1,166 MW, Tata Power Renewables’ 838 MW and Zelestra’s 381 MW projects," said Anand Rathi Share & Stock Brokers, which has a 'buy' rating on Suzlon.