Suzlon Energy vs Waaree Energies: Which stock has a higher upside potential?
The past two years (FY23 and 24) marked a turning point for India’s green energy story as the government shifted its focus to renewable energy. With an ambitious target of producing 500 GW of renewable energy by 2030, the private-public partnership fuelled a surge in orders for the country’s green energy players. Two key beneficiaries of this green initiative are Suzlon Energy, India’s largest wind turbine maker, and Waaree Energies, the largest solar photovoltaic (PV) module manufacturer.
While Suzlon and Waaree are riding the green energy wave, analysts have contrasting views on the two stocks. Both companies face a unique set of opportunities and challenges, with vastly different approaches to growth.
Suzlon Energy: Founded in 1995, Suzlon debuted on the stock market in 2005, expanded aggressively, and peaked in 2008 before defaulting on debt in 2019. It saw a turnaround in 2024. The company is now adopting a conservative expansion strategy focused on profit margin stability.
Suzlon dominates India’s wind energy market with a 31% share, with the remaining share coming from Inox Wind, Vestas Wind Systems, Enercon, and Tata Power. However, Suzlon’s biggest challenge is solar energy, which is cheaper and easier to install than wind turbines. It has seen how competitive bidding in renewable energy dried up its orders to Rs 2,973 crore in FY20 from Rs 12,714 crore in FY17, turning a Rs 852 crore net profit into a Rs 2,692 crore net loss.
Waaree Energies: Founded in 1990, Waaree made a real breakthrough when it grew its capacity sixfold from 2GW in FY21 to 12GW in FY24 as orders flowed in. With the injection of fresh equity capital of Rs 4,321 crore from its October 2024 IPO, Waaree is expanding aggressively in PV and adjacent markets.
Unlike wind, the solar sector is highly competitive, with falling PV module prices. Waaree leads both domestic (21% market share) and export (44% market share) segments.
Suzlon Energy’s stock price rallied 880% to a 15-year high of Rs 86 between May 19, 2023 and September 20, 2024. Those who hopped on the rally early benefited from the turnaround led by the government’s investment in wind and solar energy.
Waaree used the bullish market sentiment around green energy stocks to make its share market debut in October 2024. While the IPO allotment price was Rs 1,503, the shares were listed at Rs 2,500 on the NSE (66% premium from the IPO price). Because of the listing premium, its FY24 price-to-earnings (PE) ratio jumped from 34x — a discount compared to Suzlon’s 99x PE at that time — to 56.5x. Waaree’s stock surged 55% — even after the IPO listed on October 28, 2024 — to a high of Rs 3,743. It was closing in on Suzlon with a PE of 72.5x.
However, Waaree’s stock has struggled since its IPO, with prices falling 37% after Donald Trump’s US presidential victory raised concerns over green energy funding.
Not only Waaree, but all green energy stocks, including Suzlon, suffered a blow (down 22%) since Trump’s victory.
Both companies are now looking at the domestic market to drive sales and profits. This shift was reflected in their third-quarter earnings, which drove the shares of Suzlon and Waaree up 15.7% and 14.4%, respectively, in the last week of January.
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What Q3 earnings say about Suzlon
Suzlon reported a 91% surge in year-over-year revenue growth in Q3FY25 to Rs 2,969 crore, driven by record-high delivery of 447 MW, 167% higher than last year’s 170 MW.
Its earnings before interest, tax, depreciation, and amortisation (EBITDA) more than doubled to nearly Rs 500 crore, with margin improving to 16.8% from 15.9% last year. However, the company’s profit after tax (PAT) rose at a slower rate of 90% YoY to Rs 386.92 crore as its depreciation increased to Rs 66 crore (from Rs 39 crore) due to increased capital expenditure on capacity expansion.
Suzlon Energy’s Q3FY25 earnings highlights. (Source: Suzlon Energy Q3FY25 Investor Presentation)
The company added new blade lines in Madhya Pradesh and Rajasthan, and increased capacity by 1.5 GW by revamping its nacelle facilities in Pondicherry and Daman. It recently acquired renewable energy operations and maintenance service provider Renom. All this capex is funded by internal accruals and the company maintains a net cash position of Rs 1,107 crore.
In FY26 and FY27, Suzlon could see strong growth in revenue and earnings. What makes the company confident about the earnings is its all-time high order book of over 5.5 GW, which it plans to execute in the next two fiscal years. The biggest challenge for Suzlon is order execution because of delays in land acquisition for equipment, procurement, and construction (EPC) orders. However, the current order book has 80% non-EPC orders, where land availability is the customer’s responsibility. Within the non-EPC orders, it has prioritised clients like NTPC, Jindal Renewables, and Torrent Power which have substantial land availability. This brings clarity around commissioning for FY26.
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JM Financial and ICICI Securities have a Buy rating on Suzlon with a target price of Rs 80. They are bullish on its strong execution over the next 18 months.
What Q3 earnings say about Waaree
Waaree’s major revenue comes from exports. However, dynamics changed in FY25, with 79% of its revenue for the first nine months coming from India. Its Q3 revenue surged 115% YoY to Rs 3,457 crore, fueled by retail orders and faster execution. EBITDA jumped 257% to Rs 809.7 crore, while PAT grew 260% to Rs 506.9 crore.
Waaree Energies’ Q3FY25 earnings highlights. (Source: Waaree Energies Q3FY25 Investor Presentation)
Waaree’s execution timelines in India are two months for retail orders (PM Surya Ghar Yojana and PM Kusum Yojana) and 9-12 months for large utility orders. In the United States, the execution timeline is between 1 year, 2 years, and 2.5 years. Waaree is using its presence in both markets to balance profitability when one segment sees slow execution. Hence, if you look at the first nine months of FY25, revenue surged only 24% YoY, while EBITDA and PAT surged 56.4% and 60.6%, respectively.
In both cases, profit surged faster than revenue as Waaree got better raw material prices from suppliers.
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Its strong 26.5 GW order book (valued at approximately Rs 50,000 crore) provides visibility for the next two years. However, uncertainties in US policy could delay overseas orders. Although the US clients have not yet shown any signals of pause in orders, Kotak Institutional Equities has assigned a ‘sell’ rating on Waaree with a price target of Rs 2,000, 11.8% lower than the current trading price of Rs 2,268.
Looking from a long-term perspective, Waaree Energies is moving aggressively with its expansion and diversification plans. The company is working on multiple fronts such as solar cells, inverter, ingots, wafers, and green hydrogen and electrolyser manufacturing. It is also looking to acquire Enel Green Power India to expand its independent power producer (IPP) business.
Which is a better buy: Suzlon or Waaree?
Green energy stocks are cyclical, heavily dependent on government policies. Waaree, with its diversified expansion strategy, has multiple growth levers. The domestic content requirement (DCR) policy and the Approved List of Cell Manufacturers (ALCM) due to be implemented in June 2026 could be game changers for Waaree’s solar module and cell expansion capacity. However, Waaree’s high valuation (68.8x PE) makes it risky
Suzlon, on the other hand, is benefiting from steady profitability, strong execution, and a robust order book, though it lacks diversification. Its PE ratio of over 60x reduces its upside limit but a cyclical upturn creates an opportunity for a double-digit growth. Even analysts have a price target of Rs 70-80 for Suzlon.
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For investors, Suzlon presents a more stable near-term opportunity, while Waaree’s aggressive growth strategy carries higher risk. With India’s renewable energy drive in full swing, both companies will play a crucial role in the country’s journey to 500 GW by 2030.
Note: We have relied on data from http://www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.
Disclosure: The writer and her dependents do hold the stocks discussed in this article.
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