Suzlon Energy shares, often considered a multibagger stock, have recently faced significant selling pressure, plummeting nearly 30% over the last three months and hitting a 52-week low of Rs 36.30 on October 8. However, brokerage firm Motilal Oswal Financial Services (MOFSL) maintains a bullish outlook, projecting a potential 73% upside for the renewable energy solutions provider.
Attractive Valuation and Improving Earnings
MOFSL notes that Suzlon Energy's share price decline has made its valuation attractive, currently trading at 17.5x FY28E EPS. This represents a 20% discount compared to its one-year forward average minus one standard deviation valuation of 22x. The brokerage expects earnings momentum to improve significantly in the second half of FY27, which typically contributes 60-65% of the company's annual EBITDA. Deliveries are estimated to increase to 2.1 GW during 2HFY27, up from an estimated 1.2 GW in the first half.
Robust Order Book Fuels Growth Visibility
A key factor supporting MOFSL's positive forecast is Suzlon's robust order book, which stood at 5.9 GW at the end of Q1FY27. The company has already recorded approximately 1.3 GW in order inflows for FY27. This existing pipeline provides complete visibility for the estimated delivery schedule through Q3FY28, underpinning a projected EBITDA compound annual growth rate (CAGR) of 22% over FY26-28E.
India's Wind Capacity Additions on Track
India's wind power sector is experiencing strong growth, with approximately 3 GW of capacity added in the first half of FY27. Historically, second-half installations are about 1.5 times those of the first half. Applying this trend suggests additions of nearly 4.5 GW in 2HFY27, bringing total installations for FY27 to approximately 7.5 GW. This aligns with the Ministry of New and Renewable Energy's (MNRE) annual addition target of 7.5-8 GW, further bolstering the environment for wind energy companies like Suzlon.
Rising Demand Strengthens Wind Energy Case
The increasing demand for electricity, particularly during evening peak hours, is expected to drive further deployment of wind energy, often through wind-solar hybrid and firm and dispatchable renewable energy (FDRE) projects. A July 2026 paper by the Economic Advisory Council to the Prime Minister (EAC-PM) highlighted a rise in average electricity prices during May evening peaks from Rs 8.08 per kWh in 2023 to Rs 9.71 in 2026. Sustained high merchant power prices during these periods enhance the economic viability of wind power projects.
MOFSL Maintains 'BUY' Rating
Considering these factors, MOFSL has reiterated its 'BUY' rating on Suzlon Energy, setting a target price of Rs 65. This valuation implies a modest premium to the stock's historical two-year forward price-to-earnings average of 27x, justified by improving earnings visibility, a healthy order book, and a favorable outlook for wind energy capacity additions in India.
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