Suzlon Revenue Rises 26% to 4,869 Crore Rupees Despite Margin Contraction
Key Facts
Suzlon Energy’s revenue from operations rose 26% year on year to 4,869 crore rupees in the second quarter of fiscal 2027, supported by higher wind turbine deliveries, according to coverage of the company’s results. The company delivered turbines with a capacity of 710 megawatts during the quarter, compared with 565 megawatts a year earlier. But revenue growth did not translate into higher EBITDA, which came in at 720 crore rupees versus 721 crore rupees in the year-earlier period. The EBITDA margin fell to 14.8% from 18.6%, indicating that the expansion in activity was accompanied by pressure on operating profitability. Profit before tax also declined 7.8% to about 518 crore rupees.
The results showed a divergence between growth in deliveries and revenue and margins in the wind turbine business. Management said the turbine contribution margin fell to 21.2% from 26.9% in the corresponding quarter of the previous fiscal year. It attributed the decline mainly to changes in customer mix and project scope, as well as currency and commodity fluctuations. This provides an operational explanation for margin pressure at a time when deliveries and revenue increased. EBITDA remained nearly flat despite revenue expansion, while the margin contracted compared with the year-earlier period.
The chief financial officer said operating expenses rose by about 80 crore rupees year on year in the quarter, including about 50 crore rupees in costs related to Suzlon 2.0 initiatives, covering branding, travel, and general and administrative expenses. He said one-off expenses had a negative impact of about one percentage point on the EBITDA margin. The chief executive, meanwhile, estimated a normalized margin of about 16.5%-17% after excluding one-off expenses and the impact of commodities and currencies. This estimate sets out the level of performance management sees after excluding the factors that weighed on the margin in the quarter. The reported margin was 14.8%, compared with 18.6% a year earlier.
In the first half of fiscal 2027, deliveries rose 21% to 1,217 megawatts from 1,009 megawatts in the comparable period. Net profit for the first half was 699 crore rupees. Management cautioned that the prior-year figures were affected by benefits from the recognition of deferred tax assets, which affects the year-on-year comparison of profit. The first-half data adds context to the quarter’s performance: the company combined higher deliveries with revenue growth, while margin pressure persisted. This context does not change the quarter’s EBITDA of 720 crore rupees, compared with 721 crore rupees a year earlier.
On demand, the order book exceeded 6 gigawatts at the end of the quarter, while new orders topped 1.5 gigawatts in the first half of fiscal 2027. Coverage of the results call estimated that the order book provides about 18 months of delivery visibility. The volume of contracted work gives the company a timeframe for execution, while new orders reflect business inflows during the first half. The chief executive said the company is targeting a 40% market share in India by fiscal 2031, compared with about 28%-29% currently. The target sets a timeframe for the company’s expansion in its domestic market.
Analyst reactions to the results included cuts to price targets and earnings estimates. UBS cut its target price to 58 rupees from 66 rupees, while maintaining its buy recommendation, and cut its earnings-per-share estimates by 10% for fiscal 2027, 11% for fiscal 2028 and 9% for fiscal 2029. Axis Capital cut its target to 42 rupees from 63 rupees, while Nuvama Institutional Equities reduced its target to 41 rupees from 51 rupees. NDTV Profit reported that the stock ended the previous trading session down 1.45% and had fallen 33.8% over six months through October 30, 2026. These moves reflect analysts’ revisions following the results, alongside the stock’s weak performance over the period cited.
For the remainder of fiscal 2027, management said its EBITDA margin guidance is 15.1%, with potential to rise by one percentage point. It also forecast execution volume in the second half at 1.5-1.65 times the first-half volume, citing the impact of operating leverage. The full-year guidance puts the margin above the level reported in the quarter, with scope for further improvement, according to management. The execution outlook links the pace of upcoming deliveries to the benefits of operating leverage. This comes as the order book exceeds 6 gigawatts and new orders topped 1.5 gigawatts in the first half.