Risk-reward favorable at current levels
Suzlon Energy’s (SUEL) share price has been under pressure, declining 15% so far in FY26. Key investor concerns are related to the cannibalization of wind’s share in tenders from the solar + BESS segment, a slow pace of wind installation, and rising competitive intensity in wind. However, at the current price, we think the risk-reward is favorable for SUEL.
We estimate 20-24GW of incremental demand: We estimate that data centers, C&I consumers and PSUs could together drive incremental wind demand of 20-24GW by 2030 (comprising ~20% from data centers, 45% from C&I consumers and 35% from PSUs), over and above India’s targeted 100GW wind capacity by FY30.
EPC strategy as key differentiator: SUEL’s strategy to scale up its EPC share to 50% of the order book is a meaningful competitive advantage. The company’s superior execution track record vs. domestic peers, coupled with the limited participation of Chinese OEMs in the EPC space, positions SUEL favorably to capture complex and large-scale projects.
Robust near-term opportunity pipeline: About 15-17GW of wind projects are currently at the bidding/award stage, providing healthy visibility for near-term order inflows.
Strong order book coverage: With the current order book of ~6.5GW, SUEL has full coverage of our estimated WTG deliveries for 2HFY26/FY27 of 1.5GW/3.4GW and ~38% of our estimated 4GW deliveries in FY28.
Potential upside from FDRE re-bids: Of the 40GW of projects with pending PPAs, industry channel checks suggest ~17GW are pure solar, with wind accounting for a negligible share. SUEL management expects a portion of these projects to be re-bid as FDRE, which could materially improve the addressable opportunity for wind.
Exports as incremental growth lever: Exports could emerge as an additional growth driver, with management expecting to start receiving export orders in early FY27 with supplies starting from FY28.
Learning from China’s experience: While wind’s share in China’s annual RE additions declined from 25% to 18% between CY15 and CY24, installed wind capacity in absolute terms increased 2.4x. We believe this has lessons for wind share trajectory in India too.
We reiterate our BUY with a target price of INR74.
