Suzlon Energy Q2 Review: Strong Momentum and Robust Order Book

Suzlon Energy Ltd. on Tuesday posted a six-fold rise in profit in the quarter ended September, driven by strong execution, margin gains, and a robust order book. According to Morgan Stanley, the results reflected a solid performance by the company, with revenue, Ebitda, and adjusted profit growing by 84%, 145%, and 180% year-on-year, respectively.

Strong Execution and Margin Gains

The company’s strong execution and margin gains were key drivers of its profitability in the quarter. Ebitda margin stood at 18.6%, up 65 basis points from a year earlier, while interest expenses were 15% lower than expected. Other income was slightly higher, and the tax rate, excluding deferred tax, was just 0.2% compared to the forecast of 25.2%.

Operationally, Suzlon reported wind turbine generator sales of 565 MW against Morgan Stanley’s estimate of 410 MW, with first-half deliveries of 1 GW. The company has visibility of 1.86 GW for the second half, implying a total of 2.5 GW for FY26, with upside potential. Wind energy stocks have been gaining traction in recent times, driven by the growing demand for renewable energy sources.

Robust Order Book and Healthy Balance Sheet

The company’s order book remained strong at 6.2 GW, and the balance sheet was healthy with net cash of Rs 1,480 crore, down from Rs 1,940 crore at the end of fiscal 2025. This provides Suzlon with a strong foundation to invest in growth initiatives and capitalize on emerging opportunities in the renewable energy sector.

However, the operations and maintenance services segment EBIT margin fell to 25.3%, down 935 basis points year-on-year. Capex in the quarter was Rs 298 crore, and receivables remained elevated at 129 days. These are areas that the company needs to focus on to improve its overall profitability and efficiency.

Morgan Stanley’s Outlook

Morgan Stanley maintained its overweight rating on Suzlon Energy with an in-line industry view and a price target of Rs 77, implying a potential upside of around 30% from the current level of Rs 59. The brokerage highlighted that the company’s strong execution, margin gains, and robust order book position it well for future growth.

Investors looking to invest in Indian stocks can consider Suzlon Energy as a potential option, given its strong fundamentals and growth prospects. However, it’s essential to do your own research and consider your risk tolerance before making any investment decisions.

Stock Price Movement

Shares of Suzlon Energy rose as much as 2.55% higher at Rs 60.75 apiece on the NSE, before paring gains to trade 1.45% higher at Rs 60.15 compared to a 0.40% fall in the benchmark Nifty as of 1:24 p.m. The stock has fallen 11.98% in the last 12 months and 3.28% on a year-to-date basis.

Investors can track the Nifty live today and stay updated on the latest market trends and news. This can help them make informed investment decisions and navigate the Indian stock market with confidence.

Conclusion

In conclusion, Suzlon Energy’s Q2 results reflect a strong performance by the company, driven by its robust order book, margin gains, and healthy balance sheet. While there are areas for improvement, the company’s growth prospects and strong fundamentals make it an attractive option for investors looking to invest in the renewable energy sector.