Suzlon Energy shares: Why Nuvama, Motilal cut targets despite strong Q2, steller execution

Suzlon Energy shares target price: Domestic brokerage firm including Nuvama Institutional Equities and Motilal Oswal Financial Services (MOSFL) have cut their price targets on Suzlon Energy, despite its strong Q2 show and stellar execution. However, they remain largely positive on the wind energy player and see up to 23 per cent upside in the stock.

In a nutshell, Suzlon delivered a strong Q2FY26 performance, commissioning 565 MW and clocking impressive operating margin, driven by a higher WTG mix and operating leverage. Brokerages remain optimistic over execution and order visibility, with management guiding for 2.5 GW deliveries in FY26 and 6-8 GW industry installations over FY26–27, but have trimmed their multiples.

Suzlon reported a more than 6-fold jump on a yearly basis (YoY) in its net profit at Rs 1,278 crore for the September 2025 quarter, while revenue from operations soared 85 per cent YoY to 3,870 crore. Ebitda zoomed 145 per cent YoY to Rs 720 crore, while Ebitda margins expanded 460 bps to 18.6 per cent for the reported quarter.

For quarter ended on September 30, 2025, Suzlons' deliveries stood at 565 MW, highest ever for the company. Its order book has now crossed 6 GW, now at 6.2 GW, with the addition of another 2 GW in the first half of the current financial year. At the end of the given quarter, Suzlon Energy's net cash position stood at Rs 1,480 crore.

Suzlon posted a stellar 565MW in Q2FY26 with 18.6 per cent OPM, driven by a higher WTG mix. This higher execution coupled with operating leverage lifted EBITDA by 145 percent YoY to Rs 702 crore. Q2 PAT shot up 539 per cent YoY to Rs 1,280 crore, led by a Rs 720 crore deferred tax asset (DTA) creation, which cuts FY26 tax to near-zero, but raises FY27E tax liability, said Nuvama.

"Management expect additional Rs 2,000 crore DTA creation (due to past losses) post-FY28. We are factoring this into our SotP (Rs 66/share), on a discounted basis. We are revising FY26E/27E EPS by 49 per cent/-16 per cent to reflect the new DTA creation and retain ‘HOLD’ with a target price of Rs 66 (earlier INR67) based on 40 times FY28E," it added.

Shares of Suzlon Energy settled at Rs 61.01 on Thursday, indicating a 1.68 per cent upside against its previous close at Rs 60 apeice. The total market capitalization of company stood at Rs 83,600 crore. The stock has surged nearly 6.5 per cent since October 27, accounting for 6 trading sessions.

Key positives from the concall were: 1) management reiterated its confidence in a strong new order outlook, given the guidance of 6/8 GW of wind installations in India in FY26/27; 2) it has a tax shield for PBT, meaning no cash taxes at least until the end of FY27; and 3) it outlined an execution pipeline of 1.8GW for FY26, which reaffirms its confidence in delivery guidance of 2.5 GW for FY26, said Motilal Oswal.

Suzlon's consolidated revenue and Ebitda exceeded estimates with deliveries coming in significantly above our and street expectations, it noted. "We raise our FY26 estimates, mainly to account for a lower tax rate in 1HFY26. We continue to build in deliveries of 2.5/3.4 GW in FY26/27, respectively. We lower the valuation multiple to 30 times," MOSFL added with 'buy' and a slashed target price of Rs 74 apeice.