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Check Before You Invest : Suzlon Energy Ltd

BSE: 532667 NSE: SUZLON ISIN: INE040H01021
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Suzlon Energy Ltd belong to?
Suzlon Energy Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Suzlon Energy Ltd a good quality company?
Suzlon Energy Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Suzlon Energy Ltd undervalued or overvalued?
Suzlon Energy Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 24.4 5.58
Price to Book 9.94 8.11
Price to Sales 5.52 5.65
EV to EBITDA 29.09 99.87
Q.4 Is Suzlon Energy Ltd a good buy now?
Suzlon Energy Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Suzlon Energy Ltd?
Suzlon Energy Ltd revenue growth is 164.2% for FY-2025, which is above its 5-year CAGR of 93.5%, indicating faster growth.

Q.2 Gross Profit margin of Suzlon Energy Ltd?
Suzlon Energy Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.1% for FY-2025, which is above its 5-year median of -5.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Suzlon Energy Ltd?
Suzlon Energy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.04% for FY-2025, which is above its 5-year median of 2.46% indicating increasing margins.

Q.4 Net Profit Margin of Suzlon Energy Ltd?
Suzlon Energy Ltd Net Profit Margin is 20.64% for FY-2025, is above its 5-year median of 12.33%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 15.1 -5.3
Operating Profit Margin (%) 16.04 2.46
Net Profit Margin (%) 20.64 12.33

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Suzlon Energy Ltd?
Suzlon Energy Ltd Return on Asset is 22.8%, which is above its 5-year historical median of 11.3%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Suzlon Energy Ltd?
Suzlon Energy Ltd Return on capital employed is 38.65% for FY-2025, which is in line with its 5-year historical median of 38.65%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Cash conversion cycle of Suzlon Energy Ltd?
Suzlon Energy Ltd Cash conversion cycle is 62 days, above its 5-year historical median of 20 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

C: How much debt does the business have and is it at a sustainable level?

Q.8 Debt to Equity ratio of Suzlon Energy Ltd?
Suzlon Energy Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.29, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Suzlon Energy Ltd?
Suzlon Energy Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Suzlon Energy Ltd?

Q.1 Promoter shareholding and pledge status of Suzlon Energy Ltd?
Promoters hold 11.73% of the Suzlon Energy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Suzlon Energy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Suzlon Energy Ltd vs industry peers?
Suzlon Energy Ltd revenue CAGR is 93.50%, compared to the industry median CAGR of 19.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 164.2 19.2
Gross Profit Growth (%) 88.9 37
Operating Profit Growth (%) 77.4 26.6
Net Profit Growth (%) 191.2 43.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.1 1.39
ROE (%) - 18.91
ROCE (%) 38.65 32.56
Cash Conversion Cycle (days) 61.51 34

Valuation & price assessment

Q.1 Stock return of Suzlon Energy Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 15.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
15.1% 63.8% 87.4% 4.5%
Q.2 Valuation ratios of Suzlon Energy Ltd vs historical?
The current P/E ratio of 24.4 is higher than its historical median of 5.58, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 24.4 5.58 38.08
Price to Book 9.94 8.11 3.97
Price to Sales 5.52 5.65 2.75
EV to EBITDA 29.09 99.87 18.75

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