SUZLON - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 4.1

📊 Core Financials: Suzlon Energy shows exceptional ROCE (36.2%) and ROE (45.6%), reflecting highly efficient capital usage. Debt-to-equity is very low at 0.01, ensuring strong financial stability. Quarterly PAT surged (+644%), indicating a sharp turnaround in profitability. EPS of 2.22 ₹ is modest but improving, supported by strong operational leverage.

💹 Valuation Indicators: Current P/E of 23.8 is below industry average (43.9), suggesting undervaluation relative to peers. Book value of 5.37 ₹ implies a P/B ratio of ~9.8, which is expensive compared to fundamentals. PEG ratio of 0.37 highlights strong growth potential relative to valuation. Intrinsic value appears higher than CMP, offering margin of safety for investors.

🏭 Business Model & Competitive Advantage: Suzlon Energy is a leading renewable energy company specializing in wind turbine manufacturing and services. Its competitive advantage lies in strong domestic market presence, cost-efficient technology, and focus on clean energy transition. The company benefits from government support for renewable energy and global sustainability trends.

📈 Entry Zone Recommendation: Current price (52.6 ₹) is below DMA 50 (54.8 ₹) and DMA 200 (57.9 ₹), signaling weak momentum. RSI at 38.6 suggests nearing oversold levels. Entry zone recommended between 48–53 ₹ for accumulation. Long-term holding is favorable given strong fundamentals, industry tailwinds, and improving profitability.

Positive

• ✅ Strong ROCE (36.2%) and ROE (45.6%) reflect exceptional capital efficiency.
• ✅ Low debt-to-equity (0.01) ensures financial stability.
• ✅ Quarterly PAT growth (+644%) highlights sharp turnaround in profitability.

Limitation

• ⚠️ P/B ratio ~9.8 indicates expensive relative pricing.
• ⚠️ EPS of 2.22 ₹ remains modest despite profitability surge.
• ⚠️ Weak technical momentum with price below DMA 50 & DMA 200.

Company Negative News

• 📉 FII holdings decreased (-0.32%), showing reduced foreign investor confidence.
• 📉 DII holdings decreased (-0.03%), reflecting cautious domestic sentiment.

Company Positive News

• 📢 Quarterly PAT surged from 346 Cr. to 1,328 Cr., showing strong operational recovery.
• 📢 Strong 52-week performance (+23.3%) highlights investor confidence in renewable energy growth.

Industry

• 🌍 Renewable energy sector benefits from global clean energy transition and government incentives.
• 🌍 Industry P/E at 43.9 suggests higher valuations, making Suzlon relatively undervalued.

Conclusion

🔎 Suzlon Energy demonstrates strong fundamentals with exceptional return ratios, negligible debt, and a sharp turnaround in profitability. Despite modest EPS and expensive P/B, the stock remains undervalued relative to industry peers. Best suited for long-term investors seeking exposure to renewable energy, with entry near 48–53 ₹. Growth prospects are supported by sustainability trends and government policies favoring clean energy.

Would you like me to extend this into a peer benchmarking overlay comparing Suzlon with other renewable energy players (like Inox Wind, Adani Green, or Tata Power Renewables), or a sector rotation basket scan to identify diversified opportunities in clean energy and infrastructure?