Suzlon Energy trims FY27 margin guidance to 15% as costs and project mix weigh

Wind turbine maker Suzlon Energy has lowered its operating margin guidance for FY27 to 15%, down from the 17% it had projected earlier. The company blamed a less favourable mix of projects, higher commodity prices and currency swings for the squeeze on profitability.

The revision looks sharper against the first half of the year. Suzlon's Ebitda margin came in at 15.1% for April to September, so the new guidance essentially assumes the company holds roughly where it already is rather than climbing toward its earlier target. Management attributes about one percentage point of the pressure to non-recurring operating expenses, and another half a percentage point to exchange-rate movements and commodity costs tied to geopolitical tensions.

Profit held steady rather than surging. Consolidated net profit for the September quarter rose 1.3% year on year to Rs 394 crore, from Rs 389 crore a year earlier. The comparison is cleaner once one notes that last year's reported figure was inflated by a Rs 891 crore deferred tax benefit, which pushed headline profit to Rs 1,279 crore.

The company's outlook rests on volume. Suzlon says its order book remains around 6 GW even after heavy execution, which it describes as roughly a year and a half of work in hand. Management expects deliveries to pick up sharply in the second half of the fiscal year, which should improve operating leverage as one-off costs fade in the third and fourth quarters. A easing of commodity prices could add further upside.

The bigger picture is the domestic market. Ajay Kapur, CEO of Suzlon Group, pointed to India's installed wind capacity growing from about 8 GW to 13 GW over the next couple of years, a expansion that would underpin demand for turbine makers. Suzlon is also preparing to take its next-generation turbines overseas, a move that could diversify revenue beyond India.

Risks remain. Further escalation in the Middle East could push up input costs, and the company's margin path depends on how quickly project mix normalises. Suzlon argues that its largely domestic supply chain gives it some protection against import-driven cost shocks that hit rivals more heavily. For investors, the story is a near-term margin reset backed by a full order book, with the second half of FY27 serving as the test.

Read the original reporting at Economic Times.

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