Suzlon Energy Shares Fall 2% On Order Cancellations; Should You Buy, Sell Or Hold? – News18

Last Updated:April 01, 2025, 14:25 IST

Suzlon reported the cancellation of a 99 MW order from Vibrant Energy and the reduction of a 201.6 MW order from O2 Power Private Limited

Suzlon Energy Share Price: Shares of Suzlon Energy Ltd were down nearly 2 per cent on Tuesday after the renewable energy solutions provider disclosed that it experienced cancellations and reductions of several orders since January.

In a filing with the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), Suzlon Energy stated that its current order book stands at 5,622 MW, compared to 5,523 MW as of January 28. However, it acknowledged a few cancellations and reductions within this period.

Order Cancellations and Reductions

Suzlon reported the cancellation of a 99 MW order from Vibrant Energy and the reduction of a 201.6 MW order from O2 Power Private Limited (Teq Green Power XI Private Limited) to 100.8 MW. Additionally, a customer has opted not to proceed with a 100.8 MW order for the 3 MW series. These orders were originally secured between May 2023 and December 2023.

Despite these setbacks, Suzlon emphasized that new order acquisitions have offset these cancellations, ensuring no material impact on the company’s overall order book.

Analyst Perspectives on Suzlon’s Growth

On March 24, Geojit Financial Services projected strong order inflows for Suzlon in the near term, expecting continued expansion in its Commercial and Industrial (C&I) portfolio.

“WTG (Wind Turbine Generator) deliveries remain robust, but installation pace is moderate due to execution challenges such as transmission delays and land-related issues. The installation-to-delivery ratio for the first nine months of FY25 stands at 0.25X, reflecting sluggish installations. Consequently, we have revised our FY26E and FY27E revenue estimates downward by 10% and 21%, respectively, to align with execution risks,” Geojit stated.

Despite these challenges, Geojit expects a margin expansion of 70 basis points, driven by higher EBITDA contributions and improved profitability in the WTG segment due to a better project mix.

“Suzlon’s PAT is projected to grow at a 30% CAGR over FY25-27E. We value the stock at a 40x PE multiple on FY27 EPS, setting a target price of Rs 71,” the firm added.

Motilal Oswal’s Bullish Outlook

Despite the near-term hurdles, Motilal Oswal remains optimistic about Suzlon’s long-term growth, citing its global leadership in wind energy.

The brokerage has initiated coverage with a ‘buy’ rating and a target price of Rs 70, implying a 21.5% upside from Tuesday’s closing price.

“Suzlon Energy is a global leader in wind energy, boasting an installed capacity of approximately 20.9 GW across 17 countries. It is India’s largest wind energy service provider, with an installed capacity of around 15 GW. Suzlon operates with a vertically integrated structure, incorporating in-house R&D, manufacturing, project execution, and O&M services,” Motilal Oswal stated.

Policy Tailwinds for Suzlon’s Growth

Domestic policies are also poised to support Suzlon’s expansion. In March 2024, NITI Aayog proposed approving wind models only if key components such as nacelles, blades, towers, and controllers are manufactured in India. The proposal includes a 60% local sourcing requirement by value, which, if implemented, could significantly benefit Indian manufacturers like Suzlon Energy.

Additionally, India has set an ambitious wind energy target of 100 GW by 2030, up from 48 GW as of December 2024. Motilal Oswal believes Suzlon is well-positioned to capitalize on this growth through its EPC and O&M businesses.

While global players continue to invest in India’s renewable sector, Motilal Oswal asserts that domestic companies like Suzlon, with their extensive presence across the wind energy value chain, are well-equipped to benefit from these developments.