Motilal Oswal Financial Services (MOFSL) has recommended a 'Buy' rating for Suzlon Energy, projecting a target price of Rs 65 per share. The brokerage firm views Suzlon as the most credible and investable entity within the Indian wind energy sector, citing its robust market standing and a consistent history of meeting operational and execution goals.
MOFSL's analysis followed Suzlon's recent Investor Day, where the company presented a clear strategy for growth and diversification into related renewable energy segments. This roadmap aims to address medium to long-term growth concerns and bolster earnings resilience. Despite this positive strategic outlook, MOFSL noted that investors would likely remain focused on the company's execution capabilities, capital allocation discipline, and the management of working capital and leverage metrics.
Suzlon's Ambitious Growth Targets
Suzlon Energy has outlined ambitious targets, including achieving over 25 percent compounded annual revenue growth. The company also aims to expand its market share in the Indian wind sector to more than 40 percent, up from its current 33 percent, and secure a 15 percent market share in the burgeoning solar and Battery Energy Storage System (BESS) segment.
The brokerage emphasized the increasing importance of wind energy in the context of Firm and Dispatchable Renewable Energy (FDRE) and Round-the-Clock (RTC) tenders. Wind-Solar-BESS hybrid projects offer a more cost-effective solution for dispatchable renewable energy compared to solar-only BESS configurations. Recent tariff discoveries reflect this, with Wind-Solar Hybrid projects priced significantly lower than Solar+BESS only FDRE projects, primarily due to the complementary generation profiles of wind and solar, which reduce storage requirements and overall costs.
Global Market and Export Opportunities
Globally, 165 GW of new wind capacity was added last year, indicating a substantial addressable market for turbine manufacturers. MOFSL highlighted Europe as an ideal export market for Suzlon, anticipating its wind capacity to reach 2,000 GW by 2030. Europe's favorable geopolitical environment, strong policy focus on green transition, and presence of major renewable energy developers offer Suzlon significant opportunities for global expansion.
The European market is expected to see an annual wind capacity addition demand of 18 GW, alongside a considerable repowering opportunity of 18-20 GW. Leveraging its expanded product portfolio and the European repowering demand, Suzlon targets an export order intake exceeding 3 GW by fiscal year 2031, aiming for exports to contribute 15 percent of its total revenue by then.