India's largest wind turbine maker has delivered more turbines than ever in a September quarter, but its shares fell sharply as investors focused on narrower margins and a steep fall in reported profit.
Suzlon Energy reported consolidated revenue from operations of ₹4,875 crore for the July-September quarter, up 26% from ₹3,871 crore a year earlier, according to results released on Thursday, October 29, and reported by Upstox. The company's chief financial officer cited a slightly different revenue figure of ₹4,869 crore.
The Pune-based company achieved record second-quarter deliveries of 710 megawatts (MW), according to chief executive Ajay Kapur, and its order book crossed 6 gigawatts (GW).
But consolidated net profit fell 69% to ₹394 crore from ₹1,279 crore, and EBITDA was roughly flat at ₹719 crore, with the EBITDA margin falling to 14.7% from 18.6%. Suzlon's shares fell 7.9% on Friday, October 30, according to HDFC Sky.
Behind the profit decline
The headline profit decline is largely explained by an unusual item in the year-earlier quarter. Chief financial officer Rahul Jain said the September 2025 quarter "included a deferred tax asset creation of ₹ 891 crore." A deferred tax asset is recognised when a company expects to use past losses to reduce future taxes, and booking it boosts reported profit in that quarter.
Excluding that one-off item, the year-earlier profit would have been considerably lower, and Jain said the underlying year-on-year improvement was stronger than the headline figures suggest.
Margin pressure
The more significant concern for investors was the decline in EBITDA margin from 18.6% to 14.7%. Margins in wind turbine manufacturing depend on the mix of projects, raw material costs and the share of work done under engineering, procurement and construction (EPC) contracts.
Suzlon's order book has shifted towards EPC projects, which made up 38% of the order book, up from 22% in the April-June quarter of the previous financial year, according to Upstox. EPC contracts, in which Suzlon handles the entire project rather than only supplying turbines, generate more revenue per megawatt but typically carry lower margins.
Higher costs of steel and other materials, linked to global commodity price pressures, may also have weighed on margins.
A strong order book
Despite the margin decline, Suzlon's business fundamentals remain strong. Its order book of more than 6 GW provides visibility for several years of revenue. Order intake in the first half of the financial year exceeded 1.5 GW, and public sector undertakings and commercial and industrial (C&I) customers made up 78% of the order mix.
Commissioning reached 454 MW in the quarter and 723 MW in the first half. The company's net worth crossed ₹10,000 crore, a remarkable turnaround for a company that went through a severe debt crisis in the previous decade.
A comeback story
Suzlon, founded by the late Tulsi Tanti, was once one of the world's largest wind turbine makers. It expanded aggressively in the 2000s, including through overseas acquisitions, but ran into serious financial difficulties after the 2008 global financial crisis, accumulating heavy debt. After years of restructuring, debt reduction and fundraising, the company has returned to profitability and growth, riding India's renewed push for wind energy.
India's wind opportunity
Wind power is a crucial part of India's plan to reach 500 GW of non-fossil fuel capacity by 2030. While solar has dominated recent capacity additions, wind complements solar by generating more power in the evening and during the monsoon, helping to balance the grid. Hybrid projects combining wind and solar, often with battery storage, are increasingly popular.
Demand from commercial and industrial customers, which buy renewable power to cut costs and meet sustainability targets, has also grown. Many Indian companies and global corporations with operations in India have committed to sourcing renewable electricity.
Competition
Suzlon competes with global turbine makers including Siemens Gamesa, Vestas, Nordex and Envision, as well as Inox Wind and other domestic manufacturers. Chinese manufacturers dominate global wind turbine production by volume, but India's policies favour domestic manufacturing, giving local players an advantage.
What it means for investors
Suzlon's stock has been one of the most popular among Indian retail investors, given its dramatic recovery. The sharp fall on Friday shows that investors are becoming more focused on margins and profitability rather than only on order wins and volumes.
Execution is the test
For wind turbine makers, converting orders into revenue depends on execution: manufacturing turbines on time, delivering them to often remote sites, installing them and connecting them to the grid. Delays in land acquisition, transmission availability and customer readiness can push back revenue recognition. Suzlon's record deliveries this quarter suggest improved execution, but the gap between deliveries of 710 MW and commissioning of 454 MW shows that projects still take time to complete.
The supply chain
Suzlon manufactures many of its key components in India, including blades, nacelles and towers, giving it control over its supply chain and protecting it from some import disruptions. Domestic manufacturing also aligns with government policies that favour locally made equipment in renewable energy projects.
However, wind turbines still depend on some imported components and raw materials, such as specialised steel, rare earth magnets for certain designs and electronic parts. Global supply chain disruptions and commodity price increases can therefore affect costs.
The offshore question
India has set targets for offshore wind development, particularly off the coasts of Gujarat and Tamil Nadu, but progress has been slow due to high costs and the lack of supporting infrastructure. Offshore wind could eventually provide a large source of clean power, and domestic turbine makers are watching how the market develops.
What comes next
Investors will watch whether Suzlon can improve margins in coming quarters as its project mix evolves and raw material costs stabilise, and how quickly it can convert its large order book into revenue. With India's wind sector gaining momentum, Suzlon remains well positioned, but sustained margin improvement will be key to restoring investor confidence.
Many retail investors who rode the stock's dramatic recovery will be watching closely as the company works through its expanding order book.
Policy support for wind energy, including auctions for wind and hybrid projects and incentives for domestic manufacturing, will also play an important role in determining how much new capacity is built and how quickly Suzlon's order book translates into deliveries and earnings.
