Multibagger stock: Motilal Oswal sees 30% upside in Suzlon share price after 2,300% rally in five years
The brokerage set a target price for Suzlon Energy shares of ₹ 75 apiece, suggesting a potential upside of 30% compared to the stock's closing price on Tuesday.
The brokerage noted in its report that the newly-issued draft Revised List of Models and Manufacturers of Wind Turbines (RLMM) requirement for local content in wind turbine production is a significant positive factor for Suzlon Energy in the medium and long term.
Based on its investigations, power project developers are expected to ask the government for a postponement of the draft notification's implementation, although there is broad agreement that the notification's official adoption is quite probable.
Motilal identifies two main implications from the recent draft RLMM notification. First, if the draft is approved by regulators, it expects a decrease in competitive intensity in the medium term. Second, there is potential for Suzlon to increase its market share further, as Indian OEMs currently represent only about 50-60% of new orders, and the company has integrated domestic manufacturing capabilities for all essential components.
Motilal reports that Suzlon aims to increase its proportion of EPC contracts in its total order book from the current 20% to 50% in the medium term, which will be crucial for enhancing visibility and control regarding deliveries.
'Further, Indian OEMs are now exploring export opportunities that may emerge as a medium-term catalyst. While transmission issues have been a bottleneck, recent channel checks suggest some of the delayed sub-stations are now coming up, thus aiding deliveries,' the brokerage said.
The brokerage projects a delivery of 2.4GW for FY26, suggesting a quarterly run rate of 600MW, which it considers plausible. The estimates from the brokerage indicate that the company's revenue and adjusted PAT will grow at CAGRs of 46% and 58%, respectively, from FY25 to FY27. Based on the brokerage's insights, significant land acquisitions for key orders planned for FY26 have already been completed, and there is a clear visibility on power evacuation.
Suzlon Energy share price today opened at ₹ 57.84 apiece on the BSE, the stock touched an intraday high of ₹ 60.30 per share, and an intraday low of ₹ 57.43 apiece. Shares of Suzlon Energy have surged almost 2,300% in five years, providing multibagger returns for its investors.
'We reiterate our BUY rating on SUEL with a target price of ₹ 75 (based on 32x FY27E EPS). Suzlon Energy is currently trading at 24x FY27E PE, which we believe is attractive after the recent correction,' the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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