Suzlon Energy a high conviction stock, JSW Energy should see strong earnings momentum: MOFSL

Suzlon Energy is a high-conviction pick amid improving execution, a net cash balance sheet and strong earnings momentum ahead, MOFSL said in a note on utilities today. JSW Energy (JSWE) should witness earnings improvement in the coming quarters, the brokerage said adding that it also likes Acme Solar, where it is building in 18 per cent capacity base expansion YoY in FY26. 

After a significant correction since February 2025, the utilities sector has seen a notable valuation reset. MOFSL said, the companies in its coverage universe are now trading at 2.4 times one-year forward price-to-book, down from 3.1 times in October 2024. This puts valuations at a 25 per cent discount compared to the Nifty, which stood at a 14 percent discount in the same period last year.

Amid this shift, MOFSL sees selective opportunities emerging. Suzlon Energy stands out as a key pick, supported by improving delivery momentum and a robust projected profit after tax compound annual growth rate of 51 per cent between FY25 and FY27, it said.

“Additionally, the implementation of local content requirements in wind turbine generator manufacturing could act as a meaningful catalyst for the company,” the brokerage said.

JSW Energy is another name that MOFSL favors. The first half of FY26 is expected to benefit from higher plant load factors, alongside a full-quarter contribution from new capacity additions—2.1 gigawatts in thermal and 1.8 gigawatts in renewable energy, it said.

“We also remain optimistic about Acme Solar, where we are modeling substantial capacity growth—18 percent year-over-year in FY26 and an even sharper expansion of 63 percent in FY27,” it said.

While the sector has undergone a de-rating, select players with strong fundamentals and growth visibility offer compelling value, it added. 

MOFSL said positive developments with respect to the implementation of local content in wind turbine manufacturing will boost Suzlon Energy’s market share and protect margins. It is modelling in FY26 delivery of 2.4GW, implying a quarterly run rate of 600MW, which it believes is reasonable.

For JSW Energy, the earnings improvement is seen aided by the full-quarter contribution from KSK Mahanadi, Utkal unit 2 and 1.8GW of RE capacity. The brokerage said 3.4GW of JSW Energy’s wind capacity should witness improved PLFs in 2QFY26, adding that historically (FY23-25), JSW Energy has made more than 65 per cent of its full-year Ebitda in H1.