Suzlon Energy shares bounced back sharply from a decline to post a 5% jump in trading as the company has declared significant capital spending. The wind turbine company told exchanges it will spend around ₹550 crore to establish 3 centres for wind blade manufacturing using artificial intelligence in Gujarat, Karnataka and Tamil Nadu. The news gave a positive reaction to the markets, and the stock started rising from the open level of ₹38.22 on NSE to the intraday high point of ₹39.42. The investment initiative is expected to create approximately 3000 direct positions and 12,000 indirect jobs, including approximately 80% positioned throughout rural parts of the nation.

Motilal Oswal reiterated its bullish outlook and earnings momentum

Brokerage firm Motilal Oswal Financial Services Limited (MOFSL) has kept its Buy rating for Suzlon Energy with a target price of ₹65. The price target suggests a potential upside of around 73% from the current market price of near ₹38 per share. 

The brokerage noted the following factors as evidence of its positive stance and highlighted a 31% decline in the stock’s price over the last 3 months. After this pullback, Suzlon Energy trades at about 17.5x its estimated earnings in FY28, compared to its 1-year historical average forward valuation of 22 times. This valuation period is especially significant for long-term investors, according to brokerage analysts.

In FY27, Motilal Oswal has raised the estimate for its earnings growth significantly in the second half. Suzlon Energy’s operating profile has been consistently high in the second half, with around 60% to 65% of its annual EBITDA coming from the second half of the year on average. Overall turbine shipments are expected to increase from 1.2 GW during the first half of the financial year to 2.1 GW during the second half. 

This delivery-side outlook is supported by a strong 5.9 GW order book at the end of the June quarter. This order backlog equates to full-year revenue visibility into the third quarter of FY28. The brokerage expects Suzlon’s EBITDA to expand at a compound annual growth rate of 22% during the forecast period, from FY26 to FY28.

Broader industry environment across India

The overall industry dynamics in India remain favorable for the renewable energy equipment companies. India’s overall wind energy capacity grew by 3 GW in the first six months of the ongoing financial year. Installations in the second half doubled the number of capacity additions in the first half, implying that about 4.5 GW of additional capacity could be installed in the second half. 

This makes the total additional capacity from the system closer to around 7.5 GW, which is in line with official MNFE estimates of 7.5 GW to 8 GW for the full year. There is increasing appetite for wind-solar hybrid and Firm and Dispatchable Renewable Energy projects, particularly during evening peak hours when rates of merchant power are higher.

Conclusion

The recent 5% rally in the shares of Suzlon Energy has triggered positive investor sentiment on its ₹550 crore investment in artificial intelligence-driven manufacturing plants in states such as Gujarat, Karnataka and Tamil Nadu. Motilal Oswal’s anticipated delivery momentum in the second half of FY27, alongside a robust order book of 5.9 GW and favorable tailwinds in Indian wind energy, are promising prospects for earnings growth. The brokerage’s price prediction of ₹65 signals that the renewable energy major has better long-term growth potential given the attractive valuation discount after the recent corrections.