Is Suzlon a turnaround story after FY16

Thank you @Navin_J

Also, in line with the turnaround story, I wish to add some points, and will try not to duplicate previously mentioned points:

• Substantial orders secured post FY23 end (890 MW), with a total order book of 1542 MW. The new orders are for the larger 3.x MW turbines. There is going to be an emphasis on quality orders with better margin potential

• Significant improvement in reducing net debt, and the company has a positive net worth (₹1099 cr) after 10 years

• India keen to approve bids for 10 GW of wind power annually (does not include solar-wind hybrid projects, which will increase this figure further). At least 8 GW of new wind capacity will be required annually to reach a 100 GW wind capacity by 2030

• The company is focusing primarily on India, due to the massive tailwinds, and is avoiding overseas markets in the interim

• Upgrading existing wind farms with better turbines/technology can further add to growth

• Company’s OMS team is well respected in the industry, and can work with turbines from different manufacturers

• Only expecting a maintenance capex of ₹100 cr in FY24. May need to invest ₹100-150 cr over and above maintenance capex in FY25 for capacity augmentation

• In Q4FY23, the company earned ₹320 cr in net profit. Assuming the next four quarters are identical (a conservative assumption), then the current Market Cap/FY24 Earnings ratio is 17.39 (from 22267/1280), a very reasonable multiple

• The company’s OMS (operations and maintenance services) are free for the initial two years, and it’s an amazing sign when 100% of existing OMS contracts are retained when they come up for renewal each year (need to confirm the years being talked about), versus 75% for Vestas and Gamesa. In addition, Suzlon’s OMS team is happy to service non-Suzlon/multi-brand wind farms

Q4FY2023 Earnings Transcript and Investor Presentation
The Return of Wind – Forbes


A very interesting and insightful blog on tailwinds and hiccups on Wind Energy Industry. I don’t think this has been shared here yet, so just sharing the link.


Hi guys,
I think we need to understand what valuations suzlon is getting to evaluate the risk reward.

Global Players valuations

Please note this entire thing is from Brad so there might be accuracy issues but the broad picture is visible. The entire data is for 2022.


This is form ICICI so a more credible source and we have 4 international wind companies covered here. we can see that vestas and nordex are being valued at a PE of 16 to 19 for CY24E .

Valuations of some of the capital goods companies


Current valuation of suzlon

I think FY25 will be the peak for wind. I have explained this in suzlon thread and little bit here as well so after FY25 we wont have growth projections like we have right now.

If suzlon does 2GW in FY25 (doubtful) we can expected an EPS of 1.14 and the based on FY25E current PE is 17.5 times.


The current run rate is 4GW and I think we would not cross 5GW run rate. Please see the lates auction of 1.2GW where only some 600MW got executed so I believe that we would not execute more than 60% of what is tendered. So if 8GW is tendered each year execution will be of 5GW approx.

If suzlon maintains 30% so they would execute 1.5GW. If the do 1.5GW then they are trading at 24times PE.

Base on all the valuations shared above I don’t think players in this space deserve a PE of more than 20 to 25 times. So suzlon is already at these valuations and please note this is 2 years forward so there is execution risk.

He has take a big bet on it. So I think there is still some juice left but the risk reward is definitely not favorable.

My decision and how I am playing it.

  1. I am covering wind since December 2022 and I have bought suzlon @8 rs. I have exited 45% of my position form suzlon at 15rs and invested the entire thing on INOX. I think INOX has its own problems (I have written on INOX thread please read it) but the RR is favorable.

I think Inox is at 12 to 15 times FY24 earnings and currently Suzlon is getting 20 to 25 times FY25 earnings.

Suzlon is a technical hold for me because I don’t think any body in this industry deserves anything above 30 times. Even at 24 times it looks expensive.



With offshore wind energy opened up, a new growth opportunity has been created. As per the news article, bids for 4140 MW of capacity are to be issued by February 1, 2024 while bids for the remaining capacity to be opened up by FY24-25

Need to check what are the capabilities of listed indian players like Suzlon, Inox and Adani in this area to know if they can benefit from this.

@manhar - you have any insights on this?

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Found two insightful reports on current state of offshore wind power development in India, available opportunities, challenges and road ahead. Makes for very useful reading (especially in context of the earlier post I made mentioning MNRE proposal on putting bids for offshore wind in Tamilnadu):

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My view on offshore is as follows, please note these are just opinions or my understanding

I think about it this way, DICOM have incentive to buy RE energy becasue they are cheaper than coal. So price is a big incentive.

To give perspective soalr is 2.5rs wind is 3.2rs and coal is 5rs now these offshore projects are 8rs to 10rs.

In government despite having incentives things move so slow just think of it how would thing move when they have to buy it at 2× the cost.

Even for EPC company it is a big no

  1. You need technology/ experience
  2. The cost is so high, so if 1 project goes here and there, discom dont honour, which they have done in past thats it.
  3. There is so much of demand for non offshore then why go offshore unless the IRR is like too good, this means even higher cost of procuring.

Things keep change, like in suzlon the QIB news was new info, and they going debt free was new info, so if earlier i was thinking they were too expensive at 25 thst changed to 30 and now they might not underpreform inox

Similarly on offshore if there is some new technology or xyz i might change my view, as of nlw any wind comlany doing offshore is a red flag for me


@manhar - thank you for your response with detailed inputs.

Some of your inputs are in sync with what I learnt from the two reports I posted earlier. Offshore wind power generation while having a lot of benefits is a completely different animal compared to onshore. It needs different EPC skills to setup, power evacuation infrastructure, higher maintenance that is constrained by location (has to be done at near by ports which has the infra for it)…tariff rate is of course higher, but it falls over period of time.

In summary, as of now offshore wind energy is at a very nascent stage of development. While the potential is huge, people looking to profit from such opportunity will have to take it slow and let some actual progress happen on ground before taking a bet. I would let Indian players demonstrate their capabilities in this area before adding this point to my investment thesis pointers


I guess one big advantage for offshore wind farms comes with reduced red tape for land acquisition, Tamil Nadu is poised for India’s first offshore wind project .

There are a variety of views on Suzlon - some in favour of, others against it. The answer lies in the future order book and timely execution. MFs and some marquee investors have shown confidence in it. Only time will tell, how the story play out.

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The Debt has now become negligible. It is a circuit stock for the time being. In terms of valuation, it trades at 131 P/E. The sales numbers are steady, but unlike its run in the early 2010’s, the market is much more fragmented.

Quite a high valuation, the sector however is touted to outperform.

Disc: Not Invested, looking for good entry point

Suzlon - Valuation Update / 8th November 2023

Not all the Glitters is Gold, Not all that stinks is Shit - Somebody

Disclaimer : I am invested in the Co’ & I sold 30% of my holding at Rs. 26 per share worried that the stock had run a little ahead of itself.

This is more of note to self on where we stand in this story and would love to hear your thoughts on the same.

Let’s begin

The Renewable Sector is on the up. Significant changes in the underlying fundamentals have rendered the sector viable & profitable once again.

Wind Auctions have picked up, commissioning of Wind projects has increased and Suzlon & Inox have emerged from the depths of hell (too dramatic ?!), or so it appears.

Between 2017-2020, Suzlon Flirted with Bankruptcy, came close to being Acquired by a Certain large Indian conglomerate and in the process lost the Wind Energy pioneer of India, its founder, Mr Tulsi Tanti to a Heart Attack (RIP)

I’ve made a Short Youtube video about the above changes. If you’re curious you can check it out.

The first question I asked myself was what’s a reasonably flexible range of PE ratio a co’ such as Suzlon should trade at given that we know the sector is turning around.

Maybe 25-50x of Earnings would be a reasonable range. Maybe ! Let’s find out

Whether it’s 25 or 50 (Focus on the range not so much the absolute numbers) Would largely depend on 2-3 fundamental factors

  1. Current & Expected growth rate of profits
  2. Longevity of profitability
  3. Visibility/Certainty of Profitability

To see and understand a connection between Current PE & future profit growth, we can invoke the PEG ratio (PE / PAT Growth) which many growth investors like to use in evaluating Growth companies.

A PEG of 1.5 or under is considered reasonable/undervalued when the growth itself is good (20-25%+) to begin with

Which means that a co’ that can grow at 25%, may reasonably be expected to trade (under normal/positive market conditions) at 25*1.5x = 37.5X

Year 2019 2020 2021 2022 2023
Net profit after tax (PAT) (1,527) (2,642) 104 (200) 2,849
Adjusted PAT (1,527) (2,642) 104 (200) 130

In 2023, the co reported a PAT of 130 Cr (adjusted for Exceptional item from Sales of Stake & Conversion of Debt into Equity).

This 130 Cr was a big jump of ~25% from 2021 Profits & well, infinitely higher than the loss incurred in FY22 of -200 Cr.

Still considering the 25% PAT Growth, maybe, a reasonable valuation could be ~ 37.5X on a trailing earnings basis

The fact that Current PEx is 142x means that TRAILING PAT growth is NOT the the key factor driving Suzlon’s valuations

Therefore, we must obviously assume that there are ‘other factors’ included in this price of 142X PE

As we just discussed above, the ‘other factors’ are most likely :

  1. Longevity - PAT growth will continue to be high in the coming years too !
  2. Certainty - We are also quite certain that this “Robust” growth will continue into the future

Basically by pegging Suzlon’s valuations at 142X we are saying this :

> “Profits will grow fast, they will grow for a long period and we are quite sure they will continue to grow fast for a long period”

The next question which I’m sure all of us are wondering is, what the hell does fast growth, long period and quite sure really mean for Suzlon.

Let’s explore that in a little more detail.

For this part of the note, I will invoke my genie - the “Model”

It’ll only take a few minutes of fiddling with it to realize how ridiculous it can get. You end up making a lot of estimations which in combination render the outcome (PAT) to be widely distributed

Meaning, my base case shows PAT of ~ 500 Cr and my Bull case of ~950 Cr.

That’s a fairly wide number !!

BUT I convince myself it’s worth it because we can get a good sense of the key number driving the PAT, that alone may be useful to some.

The following Key metrics are driving the financials in the model

# Key Metric Comments Risks
1 Order Book (MW) Current Order Book of ~1663 is mostly executable over the next 2 years up to March 2025 - September 2025. Current commentary from Management suggests ~750-800 MW will Commissioned this Year Evacuation Infrastructure in Karnataka since ~50% of Book is in Karnataka.
2 Per MW Realization = Sales Historical numbers suggest ~5.5 Cr / MW. However, since S144 Turbine makes up 62% of Order the per MW might be higher since this is a new Turbine with higher efficiencies and it is being suggested that margins may be higher here. Suzlon has really minimal negotiating power with customer (IPPs) and my layman opinion is margins are not likely to be materially different from Current. If you’re an industry insider please feel free to educate on this.
3 Operating Profit Margins (%) Here’s another leap of faith where we’re assuming Margins are likely to remain between 14-15%. Industry is kind of expecting higher on the back of 3MW+ turbine commissioning Steel costs, which make up for 65-80% of the total material (weight wise) are pass through but other costs are not which can mess with the margins
4 Interest Cost While Debt has been reduced to 0 and the company has net cash of ~550 Cr, working capital debt remains and In FY23 it was 36% of Sales. WC has been the achilles heel for the Wind Turbine business. We have annualized the H1F24 Interest cost in the model. If it is lower, it will add straight to the bottomline. Management has said they’ve made adjustments to WC and its likely to improve but we’ll have to see.
5 Depreciation Annualized for H1F24 and assumed to be 220 Cr
6 Taxation No Taxes given Tax Loss Carry forwards.

Which lead to the results looking something like this

Without getting into the details of the model, checkout the commissioning estimates, OPM, PAT and PEx justified by the expected PAT across the Bear, Base & Bull case

If our reasoning that “37.5X PE justified by 30% PAT growth “ is reasonable to begin with, the only scenario in which on a 1 year forward basis PEx is even close (50X) is the March 24 Bull case where we assume ~ 1300 MW of commissioning happens.

I think it’s damn near unlikely !

For one, it means that the company will commission in H2 of FY24, 4X of what it commissioned in H1F24.

While the second half of the year is expected to be better, that’s a long shot. (Any Industry insiders? Feel Free to enlighten us please)

Even management said in latest concall that H2 is likely to be 2X of H1 commissioning which brings total commissioning for F24 close to 800 MW (Base case)

So, one thing appears to be very likely.

Market is discounting much further than just the next year and with much certainty !!

This means that :

  1. From the perspective of trailing PAT growth - 1.5X of 25% = 37.5X PE - Things look overvalued

  2. From the perspective of FY24 PAT growth, which is likely to be 5X (400% YOY) so on a 1 year forward basis (w/ 500 Cr PAT), PEx is ~ 88.8x which again seems ridiculous in silos but maybe is being justified by the PAT growth of ~ 400%.

  3. Market is discounting the profitability of the entire outstanding order book of 1650 MW and assuming with high certainty that it will be executed by March - September 2025.

Actually, taking the THIRD perspective simplifies things a lot :

If Suzlon was to execute the entire order book of ~ 1650 MW, how much profit can it generate?

As we have discussed above, it’s not easy to pinpoint the exact number and the numbers can vary widely BUT…

If we say per MW realization, OPM and all the other expenses are going to look something like March 24 Base Case (Highlighted in blue Pic below)

It would mean that the co’ would earn a PAT of ~1100 Cr which on the Current Market cap of Rs. 52,500 means co’ is actually trading at 47.7X on a 2 year Forward basis.

This means that the current prices imply not only that the order book will be executed in the given time frame (2 years) but that OPM will be ~15% and PAT around ~1100 and the degree of certainty of all the above happening is fairly high.

Even if the above were true, a 47.7X further implies (my personal opinion) that the order book will keep growing, and things are likely to remain bullish for the sector.

Meaning, current prices have already factored in 2 years of future earnings + an additional multiple(s) for profitability 2+ years into the future.

I love the confidence these prices seem to display but it appears things have moved much ahead of a reasonable buying range.

But then again, I sold 30% of my holdings at 26/share so who am I to say what is reasonable?

All I’m saying is, it seems that Suzlon Investors are flirting with the future as if it was the present, and leaving little room for any Execution risks.

Apologies for any errors and would love to hear your thoughts on the above.

Thank you


Great work and thanks for sharing your thought process.

I think most of us invested in Suzlon now have concerns on the valuations given the upper circuit it is hitting on almost every day basis!

In my personal view, in the short run (3-9 months) valuations can get in to extreme zones disconnected from the fundamentals. 4 broad a reasons for this could could be

  1. Stock is part of a broad narrative promising high growth
  2. Broad bull run in the market which results in most of us relaxing our strict valuation guidelines or throwing caution to wind and piling in the stock due to narrative and FOMO
  3. Operators playing with the stock
  4. Stock entering momentum category for traders to pile in which results in more momentum in the stock price which brings in even more traders and this becomes a self re-inforcing loop

Sometimes, these causes can play out in tandem which I think is happening right now in Suzlon.

During the covid bull run, I sold off many of stocks on concerns of overvaluation and then painfully saw them becoming multi baggers. It is this learning that has helped me stay invested this time through this over valuation zone.

Of course in the long run earning potential and price will converge…but we are here to make money and that may not necessarily always happen by sticking to our fundamental theories (especially for short 3-9 months time frame in a bull market).

Just my thoughts. Invested at lower levels and hence the risk of price crash does not worry too much at this stage and helps stay calm on valuation concerns in short run. No recommendations.


Many companies have stratospheric PEs, recently listed (Jio) to those expected to turn-around (Eureka Forbes) to those growing furiously and expected to grow fast (Sona/KPIT) and those at the bottom of a cycle to those representing flavour of the season (defence/power/railways).

As the earning builds up, PE will come down, is the expectation from a rising from the ashes entity.

Also, people are exuberant with low denominations/penny stocks.


Latest concall of Suzlon gives some good insights on multiple points:

  1. Demand increasing for EPC services of Suzlon…as per management, currently there are no other EPC players left in market for Wind Power Setup and commissioning.
  2. Order execution is usually 1:2 ratio between H1 and H2…this is for the overall industry as well
  3. Sharp reduction in interest cost expected from Q3 onwards …H1 interest cost was 90 Cr. So ideally majority of this should flow to bottom line in H2
  4. instead of focusing on latest and greatest Turbine size (Suzlon 3.2 MW vs Adani 5.2 MW), analyst should focus on “cost per kw” of the turbine. That as per Suzlon is the right way to look at it…They believe that Suzlon 3.2 MW will be better on this metric against Adani 5.2 MW for many sites…Wind speed and strength at each site is a key parameter that will determine what works best
  5. Suzlon has 4GW theoretical capacity, with 3 to 3.5 being real capacity. however this capacity can be scaled up quickly in different ways depending on multiple factors. So capacity is not a constraint in medium term
  6. Not planning to actively get in to Solar, unless there is a demand from customer to do so for a Hybrid project.
  7. Current order book split is 47% EPC vs 53% turbine supply
  8. They do not bid for supply unless O&M is also given to them
  9. Have also started doing O&M for turbines from other manufacturers …though it is at a smaller scale right now
  10. They are looking at Offshore Wind Energy plans. As per them, it is at a very early stage and even if bids are awarded today, it will be atleast 3-4 years before a turbine needs to be supplied
  11. Threat of chinese players flooding the market…it is a threat, but there are challenges for chinese players as well and also for IPPs who procure from them…given the severe shortage of EPC players and skills, in some cases these turbines supplied by chinese players are just lying on the ground…Govt is also becoming aware of this problem now
  12. Current order book is 1.6 GW and pipeline discussion is in progress…they have not provided any view on size of the pipeline
  13. Current order book should be consumed by FY25. However there are higher chances that Q-o-Q the delivery may get affected due to issues out of there control especially when the customers request postponing the delivers because power evacuation infra is not ready etc.
  14. Working capital costs are expected to remain elevated. Management is trying to do optimization wherever it can
  15. India might add 4.5 GW this year and 6-7 GW in FY25 of wind capacity

Disclaimer: Notes put on personal understanding and best effort basis…do your own due-diligence. Invested from lower levels and can be biased.


Blackrock has invested in Suzlon I think. There is a new notification on screener. im new to stock market. donno if im right…

As per notification, Blackrock was already an investor holding 4.99% shares. They recently bought additional 0.02% shares from market taking their share to 5.01% which mandated latest notification to exchanges.


They crossed the 5% limit overall under their discretionary management clients, which requires further disclosures.

My first thought was Blackrock is probably holding the chunk as a part of the Index funds mandate but no, the filing seems to suggest this is not the case.

Nothing to read into it other than the fact that the underlying changes in the wind Energy sector are for real, so far. Kind of like a signal for whatever its worth.

Should you be Investing in Stock Market’s Favourite Stock: Suzlon!!!

Suzlon has been one of the most market favourite stocks recently. The reason is that it has been showing signs of recovery or a powerful comeback. The wind energy company has been non-performing since its ATH of Rs. 350 in 2009. With a low of Rs. 1.7 in March 2020, the company is now trading at Rs. 40. The stock has been gaining momentum at the bourses and has also shown signs of healing in its balance sheet. Let’s deep dive into what exactly happened and how are the fundamentals turning out to be in the recent times to see if the stock prices will recover or not.

What is Suzlon’s business: Founded by Tulsi Tanti, who was also known as the windman of India, Suzlon started its operations in India and quickly expanded its footprint globally. Recognizing the potential of wind energy as a sustainable alternative to conventional energy sources, the company ventured into manufacturing wind turbines. Over the years, Suzlon has diversified its portfolio, offering a range of wind energy solutions, from wind turbine generators to complete wind farm projects. Today the company has a presence in 17 countries across Asia, Australia, Europe, Africa and the Americas.

Why did Suzlon’s Price Tumble: Troubles at Suzlon started brewing after it acquired German wind turbine manufacturer, RePower, in 2007 for ₹7,300 crore. The acquisition was partly financed by a debt of ₹4,000 crore. The initial plan was to utilize RePower’s approximately 300 million Euros of free cash to repay the Indian debt. However, a hurdle emerged when German banks, citing certain regulations or rules, refused to allow the funds to be transferred out of Germany. The company still weathered through and was raking in the benefits of globalisation. By FY09, the company had achieved remarkable success, boasting ₹26,000 crore in revenues and ₹1,600 crore in net profit, ranking among the top six global onshore turbine manufacturers. However, during the turbulent financial period of 2008-2009, Suzlon faced damaging allegations regarding cracks in turbine blades within some of its U.S. wind farms. Furthermore, the company’s balance sheet was weighed down by costly acquisitions, particularly RE Power. These factors led to a substantial decline in revenues, dropping to ₹9,500 crore in FY16 and plummeting further to ₹3,000 crore in FY20, accompanied by substantial losses exceeding ₹2,600 crore. Suzlon found itself restructuring its debt on five occasions during this challenging period. Its market capitalization tumbled from ₹68,000 crore in 2010 to a mere ₹8,000 crore. It also had to sell RE Power in 2015 for a billion Euros.

Fundamental Deep Dive:

P&L: The company’s revenue bottomed out in March, 2020 at 3000 cr after which the revenue has been growing but is still not as good as 2015 levels. Plus there is still volatility in the revenue numbers (in March 2023 revenue was 5970 cr which was 6581 cr in March, 2022). Coming to the PAT numbers, the volatility increases even more. The company mad a loss of 166 crores in March, 2022 even with the highest revenue in last 3 years. PAT in March, 2023 was 2900 cr which is a positive for the company. But looking at quarterly numbers of FY24, the Yearly PAT will definitely be below 1000 crores. The FY24 revenues numbers are likely to be better than FY23 but not better than FY22.

Balance Sheet: The company’s equity rose from 355 crore in 2014 to 2700 crore in 2024. With such high equity, it would be very difficult for them to report a good EPS. The debt of the company is very high which is 1.7 times of its equity. Would they be able to repay their debt? They have fixed asset base of 250 crore of land, 430 crore worth of buildings & 950 crore of plant & machinery. The question arises how much revenue they can generate out of these fixed assets.

Ratios: The ROCE of the company has been increasing but there is no reported ROE of the company. Margins have been volatile over the years. The book value of the company is just Rs. 2.5 with a P/B ratio of 15. Why would an investor want to pay such a high price for a company?

Shareholding: The promoter holding has been decreasing which is not a good sign. But there was promoter pledging which has been removed since September, 2023 which is a positive sign. FIIs have increased their stake from 5.5% in March, 2022 to 19.6% in March, 2024 whereas DIIs have reduced their stake from 13.6% to 6.3% in the same period. Retail Shareholding has decreased from 65% to 61% in the same period but the no. of retail shareholders have increased 20.71 lakhs to 43.55 lakhs which is also not a good sign.

Order Book Analysis: Now, the question is why the stock price recovered till Rs. 40. One sole reason for that is the order book of the company, which stood at over 3175 megawatts by the end of Q3FY24. The Capacity at Suzlon is 4 GW but real capacity is around 3 GW (3000 MW).

Based on all these above factors, my analysis suggests that this company should definitely be avoided until and unless there is consistency in the reported numbers of the company. Investing in the company just based on order book does not make sense as the company’s execution capabilities and conversion of order book into revenue is also a big question.

What do you think about the market’s most favourite stock Suzlon? Let me know in the comments….

Happy Investing!!!


Another Large Order. Can’t wait for them to actually Execute these orders :stuck_out_tongue:

Unlike in the past where they’ve stated by when the order is to be executed, there is no mention of the timelines in this press release. No Wonder.


They have mentioned that execution will always be a challenge as it’s seasonal and also depends on client’s timelines. Hence, order book size alone can’t be an indication of revenue growth for wind energy OEM sales and epc business.

They can actually set up a separate vertical or subsidiary that would build and operate wind farms that sells power to electricity boards and private companies. Once farm is set up and operational, just periodic maintenance is required… (Power generation would be seasonal of course) but it would give good visibility into revenue and growth