Motilal Oswal sets the highest-ever target price for Suzlon Energy shares at Rs 82; here's why
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Believing that Suzlon Energy Ltd (SUEL) stands to benefit from local content mandates, a strong order book ensuring revenue visibility, and improved execution via land acquisition and EPC expansion, domestic brokerage firm Motilal Oswal has assigned its highest-ever target price for the stock at Rs 82.Motilal Oswal has given a 'Buy' rating and sees an upside potential of 24% from Thursday's closing price on the BSE.'SUEL stands to benefit from regulatory tailwinds mandating local content, a robust order book providing strong revenue visibility, and execution improvements through proactive land acquisition and EPC expansion initiatives,' the brokerage said in a note.The Revised List of Models and Manufacturers (RLMM) notification mandating local content in wind turbines is expected to be formally adopted in Q2FY26. While developers have sought up to a year for implementation, policy intent remains firm.Motilal Oswal believes this could be a tailwind for Suzlon Energy.Additionally, the company's order outlook remains strong, with potential NTPC awards of 1.5 GW expected soon. FY26 total orders are estimated at 4 GW, which could raise the order book to 6.5 GW — surpassing the previous peak of 5.6 GW.However, the brokerage flagged execution as a continuing challenge in the wind sector, with FY25 capacity additions at 4.2 GW, still below the 5.5 GW peak in FY17. That said, larger turbine sizes and the expansion of projects across more states could help exceed past records.OEMs are playing a more active EPC role as their financials improve, with early land acquisition becoming more common. The shift to a land lease model and the phasing out of ISTS waivers should also ease execution bottlenecks. For Suzlon, the EPC share in the order book is expected to rise from 20% to 50% in the medium term, enhancing execution visibility.Also read: HUL shares rally 4% as Priya Nair gets CEO role: Why D-St is betting big on India's new consumer queen Suzlon's cash conversion cycle (CCC) is also projected to improve by 30–35 days over the next few years, aiding free cash flow generation. This improvement will be driven by slower growth, better inventory control from rising EPC share, and stronger supplier bargaining power.From 2HFY27 onwards, the company may also use more debt to meet working capital needs, improving balance sheet efficiency and sustaining return on equity (RoE).Given this outlook, Motilal Oswal has applied a target P/E of 35x to FY27E EPS — a slight premium to its historical two-year forward P/E average of 27x — as execution and earnings momentum are only beginning to pick up for Suzlon Energy.As of noon today, shares of Suzlon Energy were trading 0.7% lower at Rs 65.51 on BSE.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
14 minutes ago
- Business Standard
Mcap of 8 top valued cos erodes by ₹2.07 trn; TCS, Airtel biggest laggards
The combined market valuation of eight of the top 10 valued firms eroded by ₹2.07 trillion (₹2,07,501.58 crore) last week, with Tata Consultancy Services and Bharti Airtel emerging as the worst hit. Last week, the benchmark BSE Sensex dropped 932.42 points or 1.11 per cent. From the top 10 pack, only Bajaj Finance and Hindustan Unilever closed the week with gains in their valuation. Among major losers, the market valuation of Tata Consultancy Services (TCS) tumbled ₹56,279.35 crore to ₹11,81,450.30 crore. Shares of TCS dropped nearly 3.50 per cent on Friday after its June quarter earnings failed to enthuse investors. The market valuation of Reliance Industries dropped by ₹44,048.2 crore to ₹20,22,901.67 crore and that of Infosys by ₹18,818.86 crore to ₹6,62,564.94 crore. The market capitalisation (mcap) of ICICI Bank tanked ₹14,556.84 crore to ₹10,14,913.73 crore. The valuation of Life Insurance Corporation of India (LIC) diminished by ₹11,954.25 crore to ₹5,83,322.91 crore. The mcap of HDFC Bank declined by ₹4,370.71 crore to ₹15,20,969.01 crore and that of State Bank of India went lower by ₹2,989.75 crore to ₹7,21,555.53 crore. However, the valuation of Hindustan Unilever Ltd jumped ₹42,363.13 crore to ₹5,92,120.49 crore. Shares of Hindustan Unilever Ltd (HUL) on Friday surged nearly 5 per cent after the company announced that Priya Nair will become its first woman CEO and MD. The mcap of Bajaj Finance climbed ₹5,033.57 crore to ₹5,80,010.68 crore. Reliance Industries was the most valued firm, followed by HDFC Bank, TCS, Bharti Airtel, ICICI Bank, State Bank of India, Infosys, LIC, Bajaj Finance and Hindustan Unilever in that order.
Mint
15 minutes ago
- Mint
Q1 earnings, US-India trade talks and macro data to drive stock markets this week: Analysts
New Delhi, In an event-heavy week, stock investors will track quarterly earnings of several bluechip firms, the likely outcome of ongoing India-US trade talks, and inflation data for market cues, analysts said on Sunday. Moreover, global market trends and trading activity of foreign investors would also guide movement in equities, they said. "While global cues will continue to dictate trends in domestic equities, investors' focus will be on the likely outcome of India's ongoing trade negotiations with the US. Overall sentiments continue in a dilemma as the wait for a trade deal with the US continues. Traders are not confident about taking any major positive bets in this uncertain environment. "In contrast, first-quarter corporate earnings will be keenly watched over the next few weeks...," SimranJeet Singh Bhatia, Senior Equity Research Analyst at financial services provider Almondz Global, said. Markets drifted lower during the last week and lost over a per cent, primarily pressured by the lingering uncertainty surrounding global tariffs and a disappointing start to the earnings season, an expert said. Last week, the BSE benchmark Sensex dropped 932.42 points or 1.11 per cent, and the NSE Nifty tanked 311.15 points or 1.22 per cent. "Looking ahead, the earnings season will be in full focus. A packed calendar includes results from HCL Tech, Tech Mahindra, Axis Bank, Wipro, JSW Steel, among others. On the macroeconomic front, participants will closely track the WPI and CPI inflation data scheduled for July 14 for further cues on the economy,' Ajit Mishra, SVP, Research, Religare Broking Ltd, said. Apart from these, the trend in FII flows and movement in crude oil prices will also remain on traders' radar, Mishra said. Globally, markets will watch for any updates related to trade negotiations and tariffs, along with key economic data releases such as US inflation and China's GDP numbers, he added. While the tone remained largely stable in the first three sessions, profit-booking in the final sessions dragged the indices lower, Mishra said. Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, "As the earnings season progresses, markets are expected to witness volatility driven by stock-specific factors. "The lingering uncertainty around trade negotiations is likely to keep markets in a consolidation mode. Investors will now focus on key domestic macro data, including CPI and WPI inflation prints, while tracking ongoing Q1 earnings and updates on the India-US trade deal." Sentiment weakened amid heightened global trade tensions following US President Donald Trump's renewed tariff threats on Canada and other key partners, Mishra added. This article was generated from an automated news agency feed without modifications to text.
New Indian Express
an hour ago
- New Indian Express
Priya Nair: Pulling all the right levers
That Dalal Street has given a five-notch salute to the news of a small-town girl Priya Nair moving to the corner room of the country's largest fast moving consumer goods (FMCG) maker is less about she being the first-ever woman to lead the 92-year-old Hindustan Unilever, but more about her accomplishments during her three decades in the company. Priya's journey began in 1995 as a management trainee in the company that is also known as the 'CEO Factory' for grooming dozens of trainees into chief executives of large multinational corporations. Born in a middle class Malayalee family in the Maharashtra's sugar town of Kolhapur, Priya does not boast of a degree from the top B-schools – she graduated from Sydenham College in Bombay and then a master's in marketing from Symbiosis Management Institute in Pune (not from top tier IIMs), Nair's rise to the top itself breaks many a myth. The immediate reference points that the market is lapping up are how Priya has turned around the struggling beauty and skin care business of the Anglo-Dutch consumer goods giant in London as its president since 2023 and has made it a 13-billion-poundprofit company. Back home as the executive director of the home care division (2014-20), she helped boost the segmental profit margins from a low 13.1% to 18.8%, which also lifted HUL's overall margins from 15% to 22.3%. The market is also benchmarking her against the stellar show that Sanjiv Mehta (the CEO before the outgoing incumbent Rohit Jawa), who was instrumental in more than doubling annual sales to Rs 58,000 crore from Rs 25,000 crore, and market-cap soaring four times to over Rs 5.5 lakh crore during his five-year term ending in June 2023. Priya doing an encore is what the expectation is. Analysts and markets have already factored in her ability to do the not-so-easily-doable that too at a stellar scale. London-based Priya assumes a 5-year tenure from August 1 at a time when the company is facing slowing growth and intense competition from fast moving D2C brands and new-age players. Under the watch of the outgoing leadership, sales barely climbed 2% while the stock plunged 10%.
