Suzlon Energy Share: Domestic brokerage firm Ventura Securities has named Suzlon Energy Ltd. Has shared his new report regarding. Ventura believes Suzlon is a strong and sustainable wind energy company, but sees limited near-term upside at current valuations.
According to the brokerage, execution risks at higher levels may weaken investor sentiment. Additionally, most of the stock’s positive factors are already factored into the price.
Stable earnings, but challenge of working capital
According to Ventura, Suzlon’s Operations and Maintenance (OMS) business is a major strength of the company. This business manages assets of 15.1 GW. This provides stable revenue to the company. Growth is also expected in FY26.
However, since manufacturing business is capital-intensive, there remains pressure on working capital. To manage these risks, Suzlon has raised non-fund based facilities of Rs 7,000 crore.
What advantage does Suzlon have?
Suzlon works on a vertically integrated business model. This includes everything from manufacturing of turbine components to installation and long-term operation and maintenance.
The company’s S144 3.15 MW turbine is considered strong in low-wind conditions. Ventura says that continued innovation and scaling will be essential to stay ahead of the competition.
Big opportunity in Indian wind energy sector
The brokerage assesses that India’s wind energy sector is poised for rapid growth. The target is to add 6 GW of new capacity in FY26 and 100 GW by 2030. The government’s emphasis on increasing non-fossil fuel capacity and reducing GST on wind turbines from 12 percent to 5 percent are being considered a big support for this sector.
According to Ventura, Suzlon, with 30-32 percent market share, is well positioned to benefit from this growth. Also, the company will not have to pay tax up to Rs 14,000 crore of profits after Q2 FY26. Because its deferred tax assets of Rs 1,229 crore will offset future tax liabilities.
What is the target price for Suzlon?
Ventura estimates that Suzlon’s revenue could grow at a CAGR of about 34 percent to Rs 25,987 crore between FY25 to FY28. Net volume is also expected to grow at 34 percent CAGR to 3,690 MW during the same period.
Based on these data, Ventura has given ‘Hold’ rating on Suzlon. It has kept a target price of Rs 56.
What risks remain in Suzlon
According to Ventura, Suzlon faces many risks which can affect the company’s orders and earnings in the future. Due to intense price competition in the wind energy sector, companies have to bid at low prices to get new projects. This puts pressure on profits.
At the same time, due to the long tender cycle, it takes a lot of time to finalize the order. Delays in execution of projects, problems related to supply chain, permissions or infrastructure can also affect cash flow.
Stock condition and technical indicators
Suzlon Energy closed at Rs 53.60 on Tuesday with a marginal gain of 0.17%. The market cap of the company is around Rs 73.50 crore. However, the stock is still down about 30 per cent from its 52-week high of Rs 74.30.
On the technical front, Kunal Shah, Senior Technical Analyst, Mirae Asset ShareKhan, says that the stock is still in a clear downtrend. Lower tops and lower bottoms are being formed on the daily chart and the stock is trading below important moving averages. According to him, the level of Rs 60 is a strong resistance and any rise should be considered as an opportunity to exit or lighten the position.
What other brokerages are saying
However, not all brokerages are cautious. Anand Rathi Share & Stock Brokers, ICICI Securities, Motilal Oswal Financial Services and JM Financial have given buy rating on Suzlon with targets of Rs 82, Rs 76, Rs 74 and Rs 70 respectively. Whereas Nuvama Institutional Equities has maintained Hold opinion with a target of Rs 60.
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