Motilal Oswal Financial Services (MOFSL) has come out with a positive take on India’s clean energy space, identifying Suzlon Energy as a high-conviction bet on the back of its improved fundamentals and policy-supportive tailwinds. At the same time, JSW Energy will see robust earnings growth driven by recent strategic deal-making, rising power consumption, and rising capacity utilization.
MOFSL With India doubling down on its renewable energy drive and power consumption picking up, the best brokerages are honing in on the utilities space. In a comprehensive sectoral report, Motilal Oswal Financial Services (MOFSL) has made a bold call on Suzlon Energy and JSW Energy, noting their sound fundamentals, policy support, and strong growth profiles.
Though Suzlon Energy has been identified as a “high-conviction stock” based on structural reforms and turnaround in finances, JSW Energy has turned out to be a favorite pick for near-to-medium-term earnings visibility, backed by operating leverage and an aggressive growth plan.
Suzlon Energy: From Struggler to Sector Standout
From once being struggling with debt and inefficiencies in operations, Suzlon Energy has made a stunning revival, courtesy of sound financial restructuring, disciplined implementation, and beneficial policy changes. MOFSL is of the opinion that Suzlon is heading into a “supercycle of growth,” and has given it a Buy rating with a target price of ₹70, with more than 20% potential upside from where it is now.
Key Catalysts Driving MOFSL’s Confidence:
- Net Cash Balance Sheet: Having deleveraged over the years, Suzlon is now in a net cash position—a major achievement that puts it in good stead for future capex without denting financials.
- Execution Excellence: Better operating efficiency and cost leverage have improved project turnaround times.
- RLMM Notification Boost: The Revised List of Models and Manufacturers (RLMM) by MNRE is a tailwind for Indian players such as Suzlon, as it prohibits the utilization of non-Indian components in wind turbines. This will be expected to enhance order inflow visibility.
- Sudden Demand Surge: India’s renewable drive, with plans to add 500 GW of non-fossil fuel capacity by 2030, provides a structural long-term demand base for solar and wind EPC players.
MOFSL expects Suzlon to post a 63% CAGR in adjusted PAT during FY24–FY27, driven by enhanced capacity utilization, fresh order bookings, and improvement in margin. The EBITDA margins are expected to move towards 20% levels, comparable with industry benchmarks.
Brokerage Commentary:
“Suzlon is a structural turnaround story—debt-free, execution-focused, and policy-supported. We see it as a long-duration compounder with multi-year earnings growth visibility,” MOFSL wrote in its note.
JSW Energy: Riding the Wave of Strategic Expansion
Whereas Suzlon is a turnaround and policy play, JSW Energy is one of scale, consolidation, and strategic vision. MOFSL has reconfirmed its Buy recommendation with a target of ₹705, suggesting a \~25% upside.
Growth Triggers for JSW Energy:
- Strategic Acquisitions: Recent buys such as KSK Mahanadi (1,080 MW) and Ind-Barath Utkal (700 MW) will re-rate earnings in FY26 since they are entirely taken into operations.
- Merchant Market Exposure: With 15% of operational capacity open to merchant markets, JSW Energy benefits from increasing spot power prices and short-term contracts.
- Renewable Portfolio Buildout: JSW plans to increase its green energy portfolio from ~7 GW to 20 GW by 2030, reflecting a meaningful energy mix and valuation multiple re-rating.
- Fundraising Readiness: The board’s recent approval to raise ₹10,000 crore through equity or debt reflects significant balance sheet flexibility to pursue growth opportunities.
Recent Financial Highlights:
- Q4 FY25 Revenue: ₹3,189 crore (up 16% YoY)
- Q4 FY25 Net Profit: ₹408 crore (16% increase YoY)
- EBITDA Margins: ~28%, with margin improvement expectations as stabilization of new assets
JSW’s long-term power purchase agreements (PPAs), together with future solar and wind projects, provide cash flow visibility and predictability, much prized in utility investing.
MOFSL View
“JSW Energy is well-positioned with a hybrid energy portfolio, robust PPA coverage and growth visibility through inorganic and organic routes. We anticipate robust bottom-line compounding from FY25 onwards.”
Sectoral Outlook: A Multi-Decade Opportunity
India’s power sector is experiencing a tectonic shift. Growing industrialisation, urbanisation, and the move towards clean energy are fuelling conventional and non-conventional power consumption. MOFSL estimates India’s power consumption to increase at 5–6% CAGR till FY30, which will require constant investment in generation and distribution infrastructure.
Sector Trends
- Thermal Capacity Additions: In the face of intermittent renewable power issues, base load power from thermal sources is likely to stay steady in the medium term.
- Renewable Energy Push: National ambitions for 500 GW of non-fossil fuel capacity by 2030 are redefining the utilities investment landscape.
- Policy Tailwinds: Initiatives such as PLI (Production Linked Incentive) for solar panels, and capex incentives for transmission, are facilitating an enabling environment for participants along the energy value chain.
Investment Implications and Takeaways
MOFSL’s twin selections of Suzlon Energy and JSW Energy are a manifestation of a larger strategic wager on India’s energy transition story—driven by sustainability, scale, and innovation.
For Long-Term Investors:
- Suzlon is suitable for investors looking for a high-beta renewable turnaround story with multi-year compounding opportunity.
- JSW Energy provides a balanced risk-return profile with stable revenues, growth transparency, and margin enhancement.
Risk Factors to Watch:
- Policy delays, rate hikes, and capex execution risks would affect near-term valuation.
- Volatility in commodity prices, especially steel and copper, can influence turbine and infra costs.
Conclusion: Clean Energy is the Next Growth Engine
MOFSL’s investment in Suzlon and JSW Energy highlights the increased investor demand for India’s energy champions. While Suzlon captures the revival of indigenous manufacturing and clean tech, JSW Energy embodies disciplined scaling up, strategic vision, and operational resilience.
As India shifts from energy scarcity to energy security and sustainability, these firms are not only playing their part in the revolution — they are defining it.
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