Suzlon Energy shares fall 4% as Nuvama, others slash target prices after Q2 margins disappoint. What lies ahead?
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Shares of Suzlon Energy fell nearly 4% on Friday after the renewable energy player released its results for the July-September quarter of the ongoing financial year 2027, with Nuvama highlighting that the company’s profit and EBITDA missed estimates despite high growth on sales.Suzlon Energy announced its earnings in the post-market hours of Thursday, reporting a 69% year-on-year decline in consolidated net profit to Rs 394 crore for the September quarter, even as revenue increased 26% on record wind turbine deliveries. The sharp decline in reported profit was largely due to a high base in the year-ago quarter, when the renewable energy company recognised a one-time deferred tax asset benefit of Rs 891 crore. The shares of the company dropped to Rs 35.45 apiece in the early trading hours of Friday.Also read | Suzlon Energy Q2 Results: Profit plunges 69% YoY to Rs 394 crore due to one-time deferred taxExcluding this one-time item, Suzlon Energy's comparable profit after tax increased 1.3% from Rs 389 crore in the September quarter of FY26. Revenue from operations rose to Rs 4,869 crore from Rs 3,866 crore a year earlier, driven by higher wind turbine deliveries and improved project execution.Suzlon Energy’s EBITDA remained nearly flat at Rs 720 crore, while the EBITDA margin contracted to 14.8% in Q2 FY27 from 18.6% in the corresponding quarter of the previous financial year.Nuvama on Suzlon Energy share priceNuvama Institutional Equities maintained its ‘Hold’ rating on the shares of Suzlon Energy but reduced its target price to Rs 41 apiece from Rs 51 apiece. The latest target price implies more than 11% upside potential from the stock’s previous closing price of Rs 36.79 apiece on NSE.The brokerage said Suzlon Energy delivered strong execution at 710 MW, higher than the 690 MW estimate, but EBITDA margin disappointed at 14.8%. This was lower than the estimate of 16.6%, leading to a 10% miss on EBITDA and PAT. Margin weakness reflects forex or commodity headwinds and Suzlon 2.0 costs with normalised margin at 16.5-17%, it added.Despite high growth on sales, cash conversion stayed weak with receivables up Rs 5.4 billion and inventory up Rs 9.5 billion, driving negative OCF of Rs 1.8 billion, which Nuvama listed as a key concern. The brokerage cut FY27 and FY28 EPS estimates by 9% and 7% respectively, tweaking margin expectations to reflect EPC-led costs jump.Also read | Suzlon Energy Q2 profit up 1.3%, revenue rises 26%Centrum Broking on Suzlon Energy share priceCentrum Broking maintained its ‘Buy’ rating on the shares of Suzlon Energy but reduced its target price to Rs 68 apiece from Rs 74 apiece. The latest target price implies nearly 85% upside potential.“Suzlon is poised to benefit from rising wind capacity additions in India, backed by a sizeable order backlog, robust tender activity and improving execution. Growth will be driven by higher turbine deliveries, commissioning ramp-up and expansion into advanced turbines, DevCo, repowering and exports. Its established O&M franchise and strong net cash position provide recurring earnings support and financial flexibility, while margin normalisation and timely project execution remain key to sustaining growth,” the brokerage said.Suzlon Energy share priceSuzlon Energy shares have dropped around 2% in a week and 7% in a month, with the stock overall falling nearly 30% in 2026 so far. It has overall fallen more than 37% in one year.In the longer term, Suzlon Energy shares have gained nearly 17% in three years but delivered multibagger returns of more than 494% in five years. The company has a market capitalisation of around Rs 44,000 crore.Also read | Suzlon faces Adani, JSW challenge as wind energy market heats up; Q2 margins take a hitDisclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
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