Nuvama upgrades Suzlon to 'Buy' as wind outlook improves, capacity ramps up

Suzlon Energy stock: The brokerage has trimmed its target price to ₹60 from ₹66, reflecting a lower valuation multiple due to a temporary slowdown in central tendering activity.

Domestic brokerage Nuvama has upgraded Suzlon Energy to ‘Buy’ from Hold, citing stronger medium-term visibility in India’s wind pipeline and improved capacity utilisation prospects. 

 

The upgrade comes after a meaningful stock correction, even as earnings estimates remain unchanged. However, the brokerage has trimmed its target price to ₹60 from ₹66, reflecting a lower valuation multiple due to a temporary slowdown in central tendering activity. The revised target implies 30x FY28 consolidated earnings per share (EPS), or 35x for the WTG + F&F business plus O&M DCF, versus the earlier 40x.

 

The move follows key insights from Suzlon’s FY26 Manufacturing Day at its Puducherry facility, where the company outlined steady industry demand, a supportive policy backdrop and expanding export opportunities. India is expected to add 6GW/8GW/10GW of wind capacity in FY26E/27E/28E, underpinned by 17.6GW of pending orders, healthy C&I demand and a rising flow of state-level auctions. Suzlon is targeting 2GW of order inflow in H2FY26 and expects its expanded 4.5GW manufacturing capacity to be fully utilised by FY29-30. Demand from data centres and international markets adds further optionality.  CATCH STOCK MARKET LIVE UPDATES TODAY

 

 

Management highlighted a strong structural power demand outlook for India. Electricity consumption is forecast to grow at a minimum 5 per cent CAGR through 2047, driven by rising household consumption, a higher share of manufacturing, projected to rise to 34 per cent of GDP from 27 per cent,  and new electrification vectors such as EVs, green hydrogen and data centres, which could contribute 30 per cent of incremental demand. To sustain growth and begin replacing ageing thermal assets, India will need to add more than 40GW of renewable capacity annually.

 

Industry expansion is likely to be steady, analysts said. The CEA’s roadmap targets 100GW of wind by FY30, compared with the current 52GW installed and 42GW under construction. Nearly 18GW of WTG orders are yet to be placed. Annual additions are projected at 6GW in FY26, 8-9GW in FY27 and around 12GW by 2030. With complex tenders, FDRE, RTC and RE-plus-storage, now forming 70 per cent of central auctions, wind is becoming essential for meeting early-morning peak demand, complementing solar generation in India’s dual-peak load profile.

 

Suzlon is also preparing for its next leg of capacity expansion with three new smart blade factories planned from FY26 across Gujarat, Karnataka and a third location yet to be finalised. These plants aim to reduce logistics costs and position manufacturing closer to high-wind corridors.

 

On exports, India could supply up to 10 per cent of global wind demand by FY30, a share that could grow to over 20 per cent. Suzlon, already present in 17 markets with 5GW of historical installations, expects to finalise its export roadmap by end-FY26.

 

While bottlenecks persist, PSA-to-PPA delays, grid constraints and land/RoW issues, government interventions, including GNA amendments and improved state-level resource planning, are expected to ease execution challenges for Suzlon over time.    Disclaimer: Target price and stock/sector outlook has been suggested by Nuvama. Views expressed are their own.