Suzlon Energy stock: 5 potential upside triggers and a major concern

Suzlon Energy’s June-quarter scorecard was a mixed bag. The renewable energy player missed Street expectations on the bottom line, but managed to meet consensus forecasts on revenue, Ebitda, and deliveries. The numbers prompted a few brokerages to trim earnings estimates and price targets, yet a few were quick to highlight a series of developments that could be key positive triggers going ahead.

One such tailwind, according to JM Financial, comes from a July 31 directive by the Ministry of New and Renewable Energy (MNRE). The ministry has made it mandatory for wind OEMs to source key components—such as blades, towers, gearboxes, generators, and special bearings—solely from domestic suppliers. It also requires turbine data and control systems to be hosted within India, using local data centres, servers, and R&D facilities to strengthen both data security and the country’s cybersecurity ecosystem. “This is likely to create a level playing field for domestic OEMs like Suzlon,” the brokerage said.

ICICI Securities also sees the demand environment staying firm for the next two to three years, especially in hybrid and FDRE projects. The brokerage noted that Suzlon’s foray into PSU orders last year should support order inflows in the near to medium term, given the role state-run companies are expected to play in achieving India’s renewable energy goals. Export markets could add another growth leg from next year.

Motilal Oswal Financial Services (MOFSL) mapped out five upside triggers for the stock. First, while the departure of the CFO is a short-term negative, it does not believe this will slow Suzlon’s momentum, which remains buoyed by supportive policy measures. Second, it expects local content rules to lift both order inflows and EBITDA margins over the coming quarters. Third, media reports suggest Suzlon is close to signing a 700 MW, Rs 6,000 crore supply deal with Tata Power. Fourth, deliveries have picked up in Q2 FY26, with 547 MW already in the pre-commissioning stage. Finally, a potential cut in the working capital cycle—from 90 days to 75 days—is not yet reflected in estimates.

The broader wind industry backdrop also looks favourable, according to ICICI Securities, thanks to India’s ambitious renewable energy and wind capacity targets. With projects becoming more complex—moving from standalone solar or wind to hybrid, round-the-clock, and FDRE formats—the role of wind in the energy mix is likely to grow.

Still, not everything is going in Suzlon’s favour. JM Financial pointed out that while growth from commercial and industrial customers is picking up, installations have remained stubbornly low, at around 20 per cent of deliveries for each of the last three quarters—a trend it flagged as a key concern.