Suzlon Energy share price up 13% over strong Q4 results: Should you buy?

India Today

30-05-2025

Shares of Suzlon Energy rose sharply on Friday morning after the company posted strong earnings for the March quarter. The stock jumped as much as 13% in early trade, reaching an intraday high of Rs 74.30 on the BSE. By around 9:30 am, the shares were trading at Rs 72.84, up 11.34% from the previous close.This rise in share price comes after Suzlon Energy Ltd announced a sharp rise in its quarterly profit. The company posted a consolidated net profit of Rs 1,181 crore in the fourth quarter of FY25, a big increase from Rs 254 crore in the same quarter last year.This growth was supported by a deferred tax gain of Rs 600 crore. The company's sales for the quarter also increased to Rs 3,773.50 crore from Rs 2,179.20 crore a year ago, marking a growth of 73.20%.STRONG PERFORMANCE IN Q4 FY25Suzlon's performance during the January to March quarter was also supported by strong project execution. The company delivered 573 megawatts (MW) in Q4FY25, compared to the estimated 475 MW. This helped improve its operating profit margin to 18.3%, which was higher than the expected 14.7%.Despite higher depreciation and interest costs related to the Renom acquisition, Suzlon still managed to beat profit before tax (PBT) estimates by 25%, according to a report by Nuvama Institutional Equities.'Deferred tax asset creation of Rs 640 crore drove a 2.7 times profit after tax (PAT) beat,' said the report. It added that the tax benefit was recorded earlier in FY25 instead of FY26, with limited effect on FY27 expectations.OUTLOOK AND BROKERAGE VIEWNuvama Institutional Equities updated its projections for Suzlon Energy. It raised its estimates for sales by 5–7% and operating profit by 8–15% for FY26 and FY27. The brokerage kept a 'Hold' rating on the stock, with a revised target price of Rs 68, up from Rs 61 earlier.The change was based on 40 times estimated earnings for FY27 (for wind turbine generators and Foundry & Forging business) and a discounted cash flow (DCF) model for its operations and maintenance (O&M) segment.Suzlon shares have already gone up 16% in the last one month and are up 44% in the past one year, showing rising interest from investors.One area of concern highlighted by Nuvama is the low order inflow in Q4FY25, which stood below 100 MW. This was due to the cancellation or shortening of some orders. However, the company still holds a healthy order book of 5 gigawatts (GW), which is expected to be executed over the next 24 months. This gives Suzlon a clear revenue path going forward.Nuvama also said that Suzlon is likely to benefit from the increasing focus on green energy in government tenders. The company holds a strong position in the commercial and industrial segment (which makes up 55% of its order book) and also works with public sector units (PSUs).It remains one of the two main players in the EPC (engineering, procurement, and construction) and wind turbine manufacturing space in India, holding a market share of over 30%.advertisement(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)