Suzlon Energy Q1 FY25 results release: Should you buy SUZLON?

Investors and business observers are closely monitoring the performance of this massive player in the renewable energy sector as Suzlon Energy releases its Q1 FY25 results on July 22, 2024. Suzlon, a key player in the global wind turbine industry, has been riding the wave of India’s growing focus on clean energy.

Since its humble beginnings in 1995, Suzlon’s journey has reflected the evolving landscape of renewable energy. As we analyse the Q1 FY25 results and Suzlon Energy’s share price, we’ll explore what these numbers mean for Suzlon’s future and the broader implications for the wind energy sector in India.

Suzlon Energy: Company Details

As an international provider of renewable energy solutions, Suzlon Energy ventures into the global wind turbine industry as a manufacturer.

Suzlon Energy was founded in 1995 and began to enter international markets in 2003. The company specialises in developing designs and manufacturing components such as gears, generators, and equipment for wind projects and services, to name a few. 

Apart from manufacturing, Suzlon Energy taps into executing projects and handling generators for wind turbines, along with O&M services. The firm has more than 20 GW of wind turbines deployed in more than 15 countries as of 2024.  Suzlon Energy also provides its services to power utilities and electricity producers in its client portfolio. Their clients include ACC, Aditya Birla Group, ITC, Tata, ONGC, and other renowned names.

Suzlon Energy news today: Q1 FY25 results

Suzon Energy released its Q1 results for the financial year 2025 on July 22, 2024. The wind turbine manufacturer reported a substantial surge in its consolidated net profit, which soared to ₹302 crore for the quarter ending June 30, 2024. This represents a staggering 200% increase compared to the ₹101 crore recorded in the same quarter of the last financial year.

Analysts expected Suzlon Energy to report robust YoY performance in terms of profit, EBITDA, and sales. The Net Profit was expected to go up 61% year-on-year. They have also estimated the PAT to be expanded 1.75 times, along with a Net Profit of ₹277.8 crore.

Coming to the results, the company’s operating revenue climbed to ₹2,016 crore, marking a 50% jump from the ₹1,348 crore generated in the same period of 2023.

The firm’s profitability metrics also showed impressive improvement. EBITDA reached ₹370 crore in Q1 FY25, up from ₹199 crore in Q1 FY24—an 86% year-on-year increase. This growth in EBITDA outpaced the revenue growth, indicating enhanced operational efficiency.

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Further underscoring this efficiency gain, Suzlon’s EBITDA margin expanded to 18.4% in the quarter under review, compared to 14.8% in the same period last year. This 360-degree improvement in margin suggests the company has successfully managed its costs while driving growth.

Suzlon Energy’s first quarter of fiscal year 2025 was marked by several notable achievements, setting new benchmarks for the company’s performance over the past seven years.

The renewable energy firm reported a significant uptick in its delivery capabilities, dispatching 274 megawatts (MW) of power generation equipment during the April–June period. This output represents the highest Q1 delivery volume the company has achieved since 2018, demonstrating a robust recovery in its operational capacity.

Simultaneously, Suzlon’s financial performance reached a seven-year peak, with the company posting its highest quarterly EBITDA figure since 2018. Perhaps most impressively, Suzlon has secured an unprecedented volume of future business. The company’s order book has swelled to 3.8 gigawatts (GW), the largest in its nearly three-decade history.

Amidst India’s strong trajectory in the wind energy sector, the company has been performing vibrantly, with a strong order book and a healthy pipeline of orders. The company is planning to integrate automation in the financial year 2026 to shorten the turnaround time.

Reviewing past quarters: FY24 vs. FY25

Suzlon Energy has been showing a trend of improving financial performance over the past quarters. The company’s operating profit showed steady growth throughout FY24, starting at ₹199 crore in June 2023, increasing to ₹225 crore in September 2023, and reaching ₹357 crore by March 2024. 

Similarly, the profit before tax and net profit figures also exhibited an upward trajectory. The profit before tax rose from ₹101 crore in June 2023 to ₹253 crore in March 2024, while the net profit increased from ₹101 crore to ₹254 crore over the same period. 

Results (₹ crore)	June 23	Sep 2023	Dec 2023	March 2024	June 2024
Operating Profit	199	225	248	357	370
Profit before tax	101	102	203	253	302
Net Profit	101	102	203	254	302

Source: Screener

Suzlon Energy share price today

On July 22, 2024, Suzlon Energy’s share price was trading at ₹54.11, down 1.08%. Suzlon’s share has gone down 1.32% in the last month. After the Q1 results, the Suzlon share shot up 4.76% and traded at ₹57.70 as of July 23, 2024 (10:53 a.m. IST). According to the Suzlon Energy stock price history, in the last 6 months, Suzlon’s share went up 31.25% and 170.20% in the past 1 year.

Coming to the Suzlon Energy share price target, the stock has been maintaining a “buy” rating with a target price of ₹58 for 12 months. According to Morgan Stanley, the target price is even higher, at ₹58.5.

Suzlon Energy’s current financials (as of July 22, 2024)

Market cap	₹73,250 Cr.
Stock P/E	103
ROCE	24.7%
ROE	28.4%
Industry PE	59.6

Shareholding pattern of Suzlon Energy

Below is the shareholding pattern of Suzlon Energy as of June 2024.

Promoters	13.27%
FIIs	21.53%
DIIs	9.17%
Public	56.03%

Suzlon Energy share: Should you invest?

So, the question remains: Should you invest in Suzlon Energy today after the Q1 FY25 results? Let’s understand the company’s investment potential. 

Strengths 

• Impressive financials

As mentioned above, Suzlon Energy reported impressive Q1 results for the financial year 2025, which was reflected in Suzlon’s share price jump the morning after (July 23, 2024). The PAT has climbed almost 3x compared to the same quarter a year ago to ₹302 crores for this quarter. The overall Q1 results are also promising for the company, with “Buy” recommendations from various analysts. 

• Stability in cash flow

As of March 2024, the company had more than 14 GW installed fleet under the O&M segment. The O&M business has been stable so far, maintaining steady revenue. With stable cash flow and ₹700 crore EBITDA, the company is anticipated to grow thanks to the O&M business. 

• Promising order book with a leading position in the market

Suzlon Energy has demonstrated technical proficiency in project execution and an impressive market share of over 30% in India’s WTG segment. It is safe to say that the company will continue its robust market share in the long run as well. As of March 2024, the order book had around 3.88 GW that was scheduled to be executed until FY 2026. 

• Healthy risk profile

The company shows a healthy debt-to-equity ratio of 0.04, which demonstrates the strong risk profile of Suzlon Energy. As of March 2023, the term debt was ₹1,773 crore for Suzlon, backed by positive net worth growth. 

Weaknesses

• Competitive industry 

The wind energy industry is rapidly expanding, making it more competitive to lead Suzlon Energy in the future. While Suzlon shares more than 30% of the market, it faces high competition from other domestic players.

• High P/E ratio

The company has a high PE ratio of 103, while the industry PE ratio stands at 59.6. This means Suzlon Energy’s stock price might be overvalued and carries the risk of going down in the future. 

Source: CRISIL

Bottom Line

Energy’s Q1 FY25 results paint a picture of a company at a crucial juncture. With a strong order book, improving financials, and a significant market share in India’s wind turbine sector, Suzlon appears to be well-positioned. However, the company faces challenges, including intense competition and a high P/E ratio, that might concern value investors.

As India transitions towards cleaner energy sources, Suzlon’s performance will be closely watched as a barometer for the wind energy sector.