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Suzlon Energy's stock experienced a significant rally, surging 8% following the release of a draft notification by the Ministry of New and Renewable Energy (MNRE). This draft proposes amendments to the procedure for including and updating wind turbine models in the Revised List of Models and Manufacturers of Wind Turbines (RLMM). The core of the amendment lies in mandating local sourcing of key components, a move that is widely anticipated to provide a considerable boost to Indian Original Equipment Manufacturers (OEMs). Motilal Oswal Financial Services, a prominent domestic brokerage firm, remains optimistic about Suzlon Energy's prospects, projecting that the company is poised to gain market share under this new framework in the near to medium term. This positive outlook is largely attributed to Suzlon's established domestic manufacturing capabilities, which position it favorably to capitalize on the increased emphasis on local sourcing. The draft notification, if finalized, is expected to address concerns regarding competition from Chinese OEMs, mitigating potential market share loss and margin pressure. Suzlon, with its comprehensive domestic manufacturing infrastructure, is viewed as a market leader well-equipped to benefit from the policy shift.
The key provisions outlined in the revised framework underscore the focus on domestic manufacturing, enhanced technical disclosures, certification and collaboration details, data localization and cybersecurity, and research and development (R&D) requirements. However, the extent to which these provisions will apply to existing entries in the RLMM, in addition to new inclusions, remains unclear. The draft specifies that the type certificate of a wind turbine model must mandatorily include a Blade, Tower, Gearbox, and Generator manufacturing facility located in India. Furthermore, these components must be sourced exclusively from such facilities. An exemption is provided for the import of these components, limited to 200 MW or one year, whichever comes first, for any new turbine manufacturer or new model being added to the RLMM. This mandatory domestic sourcing requirement is expected to significantly diminish the pricing advantage previously enjoyed by Chinese companies, which had been importing key components from China. Motilal Oswal believes that this measure will effectively limit participation in the wind turbine manufacturing space to long-term players who are committed to investing capital and time in establishing domestic manufacturing capabilities. Consequently, Motilal Oswal has maintained a 'buy' rating on Suzlon Energy, with a target price of Rs 75.
The market reacted positively to the news, with Suzlon Energy's shares surging to Rs 59.70, resulting in a total market capitalization of approximately Rs 81,500 crore. Despite the recent surge, the stock is still down 31% from its 52-week high of Rs 86.04, reached in September 2025. Another domestic brokerage firm, JM Financial, anticipates a significant increase in Suzlon Energy's revenue, projecting a 56% year-over-year growth to Rs 3,421.1 crore in the March 2025 quarter. This projection is based on estimates of higher dispatches during the quarter. JM Financial also expects improvement in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), driven by better order dispatch and execution year-over-year. The firm forecasts EBITDA to reach Rs 542.4 crore, a 52% year-over-year increase, while net profit is projected to be Rs 444.7 crore, representing a 75% year-over-year growth. JM Financial also holds a 'buy' rating on Suzlon Energy, with a target price of Rs 71. The combined positive assessments from Motilal Oswal and JM Financial suggest a favorable outlook for Suzlon Energy, driven by the new MNRE framework and anticipated improvements in operational performance.
The implications of the MNRE draft notification extend beyond Suzlon Energy, potentially reshaping the entire wind energy sector in India. By prioritizing domestic manufacturing, the government aims to create a more self-reliant and competitive industry, reducing dependence on foreign imports and fostering local job creation. The enhanced technical disclosure requirements and emphasis on data localization and cybersecurity are also intended to improve the overall quality and security of wind energy projects in the country. However, the transition to a more domestically focused manufacturing ecosystem will likely present challenges for smaller players in the industry, who may lack the resources to invest in the necessary infrastructure and technology. The exemption for component imports for new turbine manufacturers or models provides a temporary window for these players to adjust to the new requirements, but long-term success will depend on their ability to establish robust domestic supply chains.
The focus on R&D in the revised framework is also crucial for ensuring the long-term competitiveness of the Indian wind energy industry. By encouraging innovation and technological advancements, the government aims to drive down the cost of wind energy and improve its efficiency, making it an even more attractive source of clean energy. The success of this initiative will depend on effective collaboration between industry, academia, and government research institutions. Furthermore, addressing the issue of grid integration and storage remains a key challenge for the widespread adoption of wind energy. As wind power generation becomes more prevalent, it is essential to develop robust grid infrastructure and energy storage solutions to ensure a reliable and stable supply of electricity. The government's policies and investments in these areas will play a critical role in unlocking the full potential of wind energy in India. In conclusion, the MNRE draft notification represents a significant step towards promoting domestic manufacturing and strengthening the Indian wind energy sector. While challenges remain, the potential benefits of this policy shift are substantial, including increased market share for domestic players like Suzlon Energy, job creation, and a more sustainable and secure energy future for India.
The surge in Suzlon Energy's stock price is a clear indication of investor confidence in the company's ability to capitalize on the opportunities presented by the new MNRE framework. Suzlon's established track record and strong domestic manufacturing capabilities position it favorably to benefit from the increased emphasis on local sourcing. The company has already made significant investments in its manufacturing infrastructure and has a proven ability to deliver high-quality wind turbines. However, Suzlon will need to continue to innovate and adapt to evolving market conditions in order to maintain its competitive edge. This includes investing in new technologies, expanding its product portfolio, and strengthening its customer relationships. The company will also need to address challenges such as supply chain disruptions and rising commodity prices, which could impact its profitability. Despite these challenges, the overall outlook for Suzlon Energy remains positive, driven by the growing demand for renewable energy in India and the government's commitment to promoting domestic manufacturing. The company is well-positioned to play a leading role in the country's transition to a cleaner and more sustainable energy future.
The contrasting target prices from Motilal Oswal (Rs 75) and JM Financial (Rs 71) reflect differing perspectives on the potential upside for Suzlon Energy. These differences may be attributed to variations in their underlying assumptions about factors such as revenue growth, profitability margins, and market share. While both firms have a 'buy' rating on the stock, the higher target price from Motilal Oswal suggests a more optimistic outlook for the company's future performance. Investors should carefully consider these different perspectives when making investment decisions and conduct their own due diligence to assess the risks and opportunities associated with investing in Suzlon Energy. It is important to note that target prices are not guarantees of future performance and are subject to change based on evolving market conditions and company-specific factors. Ultimately, the success of Suzlon Energy will depend on its ability to execute its business strategy effectively and navigate the challenges and opportunities in the rapidly evolving renewable energy sector. The MNRE draft notification has undoubtedly created a more favorable environment for domestic manufacturers, but the company's long-term success will depend on its own internal capabilities and strategic decisions.
One aspect that requires further clarity is the application of the new provisions to existing entries in the RLMM. If these provisions are applied retroactively, it could create significant challenges for companies that have already been importing components from China. However, if the provisions only apply to new inclusions in the RLMM, it could create a two-tiered market, with different rules for existing and new players. The MNRE will need to provide clear guidance on this issue to ensure a level playing field and avoid creating unnecessary uncertainty. Furthermore, the government should consider providing incentives and support to help smaller players adapt to the new requirements, such as access to financing, technology transfer programs, and training opportunities. This would help to ensure that the benefits of the new framework are shared more widely across the industry and that all players have the opportunity to participate in the growth of the renewable energy sector. The long-term success of the MNRE's efforts will depend on a collaborative approach that involves all stakeholders, including industry, government, and research institutions. By working together, these stakeholders can create a more robust and sustainable renewable energy ecosystem in India.
Source: Suzlon Energy shares rally 8% after MNRE draft; Motilal Oswal see more upside