MOFSL sees upto 46% upside in this renewable energy stock; reiterates 'Buy'

Suzlon Energy is also preparing to enter overseas markets, with exports to the Middle East and Europe expected to begin by FY27.

MOFSL on Suzlon Energy: Domestic brokerage Motilal Oswal Financial Services (MOFSL) has reiterated its ‘Buy’ rating on Suzlon Energy, projecting a target price of ₹80 -- an upside of up to 46 per cent from current levels. 

 

Analysts at MOFSL believe the company is transitioning from a turnaround phase to a full-fledged growth story, supported by favourable policy tailwinds, localised supply chain strengths, robust research and development (R&D), and rising execution capacity.

Here are the top reasons behind MOFSL’s ‘Buy’ call:

CEO reaffirms long-term commitment

 

In a recent expert session hosted by MOFSL, Group CEO J P Chalasani underlined his long-term commitment to Suzlon, stressing that his role as CEO carries no sunset clause and is driven by strategic purpose. He highlighted the company’s focus on strengthening operations and noted that the appointment of a new CFO is in its final stages.

 

 

ALMM to drive indigenisation

 

Chalasani pointed to the government’s introduction of an Approved List of Models and Manufacturers (ALMM) for wind turbine generators as a game-changing policy. The framework is expected to push domestic manufacturing, improve product quality, and position India as a global wind export hub. Over time, localisation mandates could extend to critical components like gearboxes, bearings, and generators – spurring deeper supply chain investments and creating opportunities for domestic OEMs such as Suzlon.

 

Drawing parallels with the solar sector, he noted that ALMM for solar modules was later extended to cells and wafers, suggesting a similar trajectory for the wind industry. For foreign turbine makers, however, localisation could be fraught with challenges, as critical components require customisation and collaboration with Indian suppliers, often involving 6-12 months of re-engineering.  ALSO READ | Nuvama sees pressure on Bharat Forge, SAMIL, others on muted demand outlook

Suzlon’s competitive edge

 

Currently, most global OEMs limit India operations to partial assembly. In contrast, Suzlon stands out as the only domestic OEM with end-to-end R&D, design, and prototype testing facilities already in place. This provides the company a competitive edge as localisation mandates tighten and foreign OEMs navigate execution hurdles.

 

Policy clarity awaited

 

While the intent behind ALMM is clear, several details remain pending, including definitions of localisation requirements and SOPs for R&D centers. These rules, being finalised by the Ministry of New and Renewable Energy, will determine the feasibility and timelines for foreign OEM participation.

 

Wind, solar, and BESS to drive energy security

 

Chalasani stressed that wind energy and battery energy storage systems (BESS) should be seen as complementary solutions to renewable intermittency. With solar additions creating grid imbalances, wind power offers stability while BESS absorbs excess supply. Both technologies, he argued, are indispensable to India’s energy-secure future.

 

EPC expansion and strong order pipeline

 

Suzlon is targeting a steady order backlog of at least 5 GW, supported by robust demand visibility. Currently, its engineering, procurement and construction (EPC) business contributes 22 per cent of the order book, a share management aims to increase to 50 per cent by FY28. While EPC carries thinner margins, it ensures greater control over project execution, including land acquisition, right-of-way, and grid connectivity.  ALSO READ | PL Capital bets on these 3 chemical stks despite sector headwinds; details

Suzlon’s global expansion plans

 

The company is also preparing to enter overseas markets, with exports to the Middle East and Europe expected to begin by FY27. Unlike domestic projects, Suzlon’s international strategy will be limited to equipment supply, avoiding EPC-related execution risks. The US remains uncertain due to tariff issues.

 

Suzlon Energy valuation, outlook

 

Given these factors, analysts at MOFSL value Suzlon at 35x FY27E EPS, slightly above its historical forward P/E, given improving execution and earnings momentum. The brokerage expects regulatory support, a robust order book, and proactive EPC expansion to drive growth.