Motilal Oswal bullish on Suzlon, sees up to 24% upside potential

Mumbai, July 11, 2025 — Leading domestic brokerage Motilal Oswal Financial Services has turned bullish on Suzlon Energy, one of India’s most prominent renewable energy companies, projecting an upside potential of up to 24% from current levels. The firm has reiterated a ‘Buy’ rating on the stock with a target price of ₹60, driven by improving financials, a robust order pipeline, and a favorable policy environment for the wind energy sector.

Order Book Strength and Industry Momentum

Suzlon has seen a strong rebound in its business trajectory over the past year, bolstered by a substantial order book exceeding 3 GW. According to Motilal Oswal, this reflects the rising momentum in India’s renewable energy push and specifically in wind installations, which had lagged solar in recent years but are now regaining ground.

“Suzlon’s execution capabilities and competitive positioning in the domestic market put it in a strong spot to benefit from India’s ambitious renewable energy goals,” the brokerage stated in its latest report. The government’s target of achieving 500 GW of non-fossil fuel capacity by 2030, including a significant share from wind energy, is expected to catalyze sustained demand.

Financial Turnaround Gains Steam

Suzlon’s balance sheet, once burdened by heavy debt, has seen meaningful deleveraging over the past few quarters. The company reported a net profit of ₹176 crore in Q4 FY25, marking its fifth consecutive profitable quarter. It has reduced net debt significantly, aided by internal accruals and asset monetization.

“The company’s sharp focus on improving working capital efficiency, cost optimization, and maintaining a capital-light model has helped drive margin expansion,” said the Motilal Oswal report. It also noted that EBITDA margins have stabilized around the 17–18% mark, with potential for further improvement as operating leverage kicks in with scale.

Improved Execution, Policy Visibility

India’s wind energy sector has been receiving a series of regulatory and policy tailwinds, including Renewable Energy Certificates (RECs), stricter Renewable Purchase Obligations (RPOs), and financial support for hybrid and offshore projects. Suzlon is also seen as a key beneficiary of the central government’s recent production-linked incentive (PLI) schemes, which aim to boost domestic manufacturing of renewable energy components.

Analysts also appreciated the company's improved execution timelines, which had long been a concern in past years. “Execution risks have moderated significantly due to improved supply chain visibility, vendor alignment, and labor availability,” said Raghav Bhandari, energy analyst at Motilal Oswal. “The company is well-positioned to commission over 1 GW annually for the next two years at a minimum.”

Valuation and Stock Performance

Suzlon’s stock has gained over 100% in the last 12 months, outperforming the Nifty Energy index. At its current price of around ₹48, the brokerage sees a fair value of ₹60, implying a 24% upside. The company is currently trading at a 12x FY26E EV/EBITDA, which analysts deem reasonable given growth visibility, asset-light operations, and consistent profitability.

“We believe Suzlon is in the early stages of a multi-year growth cycle, and current valuations do not fully capture its structural turnaround, strong order inflows, and improving return ratios,” the Motilal Oswal report added.

Investor Outlook: Wind in the Sails

Despite a stellar rally, analysts believe there’s more headroom for growth. Institutional participation in Suzlon has increased, with mutual funds and foreign investors gradually adding the stock to their renewable energy portfolios. However, Motilal Oswal also cautioned that investors should keep an eye on global commodity price volatility, forex movement, and any potential delays in project execution due to externalities.

“As the energy transition theme strengthens and India doubles down on wind energy integration, Suzlon offers a compelling risk-reward proposition for medium- to long-term investors,” Bhandari concluded.

Motilal Oswal’s bullish stance on Suzlon Energy underscores growing confidence in India’s clean energy growth story and in Suzlon’s renewed operational strength. With financial discipline, strong policy backing, and sectoral tailwinds, the company appears poised for sustainable growth in the coming years.