Suzlon Energy (SUZLON)

FairStock Score: 69/100 — STEADY

Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Exceptional profitability: ROE 52.92%, ROCE 32.52%, and latest quarter net profit ₹445 Cr on sales ₹4,236 Cr.
• Strong financial health: debt/equity 0.05, Altman Z-score 5.01, and Piotroski F-score 8/9.
• Rapid growth: sales up 61.67%, profit up 182.57%, 5-year revenue CAGR 26.62%, with a PEG ratio of 0.43.
• Positive free cash flow of ₹343 Cr indicates underlying earnings are being converted into cash.

Concerns

• Price of ₹53.73 is far above conservative value measures: Graham Number ₹16.14 and DCF value ₹6.72, giving a margin of safety of -164.36%.
• Valuation is rich at P/E 17.97 and P/B 11.97 against book value ₹4.49, with zero dividend yield.
• Promoter holding is only 11.73%, raising corporate governance and alignment risk.
• Negative EV/EBITDA of -6.81 is unusual and needs scrutiny, especially in a cyclical heavy electrical equipment business.

AI Analysis

When I evaluate Suzlon Energy, I first ask what owner earnings tell me. The latest quarter shows sales of ₹4,236 Cr and net profit of ₹445 Cr, with free cash flow of ₹343 Cr. ROE of 52.92% and ROCE of 32.52% are exceptional, and debt-to-equity of just 0.05 shows the balance sheet is far healthier than in the past. The Piotroski score of 8/9 and Altman Z-score of 5.01 reinforce that this is not a distressed company. Growth is real: sales rose 61.67%, profit rose 182.57%, and the five-year revenue CAGR is 26.62%. A PEG ratio of 0.43 suggests the market is not demanding full price for that growth. But I do not buy a business simply because it is good; I buy when price and value are in my favour. At ₹53.73, the market cap is ₹58,050 Cr, with a P/E of 17.97 and a P/B of 11.97 against book value of just ₹4.49. Graham would compare price to conservative measures: the Graham Number is ₹16.14 and the DCF value is ₹6.72, both far below the current price. The margin of safety is deeply negative at -164.36%. That means I would be dependent on future growth to protect capital, not on the margin of safety. A zero dividend yield gives me no current return while waiting, and promoter holding of only 11.73% raises alignment concerns. Wind power equipment is also a cyclical business where order flows can be lumpy. Despite excellent recent operating numbers, the price leaves little room for error. This is a fast grower, but at this price it is not a Graham-style bargain.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer