Suzlon share price jumped as much as 11% intra-day as Q4 profit surged nearly 4x. The company has executed 573MW in Q4FY25. This is higher than street estimates. The operating margins too saw significant improvement at 18.3%. The company’s wind turbine generator mix-led helped drive profitability this quarter and offset depreciation interest cost.
However, the deferred tax asset creation (Rs 640 crore) has now effectively advanced the benefit of the lower tax incidence to FY25 instead of FY26. This has limited the scope for any sharp near-term upside in the share price, as per many brokerages.
Motilal Oswal on Suzlon: Boost from strong execution
Motilal Oswal has given a big thumbs up to Suzlon’s on strong Q4 show. They see nearly 27% upside in the share price with a target of Rs 83 per share and have reiterated the Buy call. They expect FY27 “earnings growth around 35x, given execution and earnings are just picking up for Suzlon.”
While FY27 guidance was not provided, the management expects India-level wind installations to improve to 6-9GW between FY26-FY28 from 4.2 GW in FY25. Following the earnings call, “the early implementation of local content-related draft notification can be a strong catalyst” for the Suzlon stock they added.
Nuvama on Suzlon: Long-term positive
Nuvama is positive on Nuvama over the long-term but maintained the ‘Hold’ recommendation as it sees limited upside in the immediate term. They have a target of Rs 68 per share and have tweaked the FY26 and FY27 earnings estimates higher by 5–7% on strong guidance for sales growth.
The big positive for Nuvama is the pick-up in Suzlon’s execution resulting in a top line of Rs 3,800 crore. The uptick in FY25 execution was “was aided by capacity ramp up to 4.5GW. Installations are likely to pick up with management guiding for 60% growth in deliveries, revenue and EBITDA in FY26.” they added. They are factoring in 2.5/3.2GW execution over next two fiscals.
Suzlon: Margins encouraging
The margins for Suzlon have been a bright spot in Q4. It gathered steam as execution ramped up. According to Nuvama, “EBITDA margin came in at 18.3% due to WTG-led operating leverage benefits and weak installations (EPC costs to be booked upon installations) due to transmission and land challenges, which management expects to ease out in the future.”
The management expects FY26 depreciation at Rs 400 crore and interest at Rs 250crore. The wind-turbine generator contribution is seen at 23% going forward.