Suzlon and Inox Fly High as Govt Plans to Push Localisation in Turbine Manufacturing

Shares of wind players--Suzlon Energy and Inox Wind surged as much as 8% and 6%, respectively, on April 21, after the Ministry of New and Renewable Energy advocated for increasing localisation in the manufacturing process of wind turbines, sparking hopes of improved growth prospects.

In a latest draft notification for revised list of models and manufacturers for wind turbines, the ministry mandated to procure blades, towers, gear box and generators compulsorily from domestic vendors.

The ministry also asked to set up a data centre and a research and development centre in India within six months. These measures are aimed to address concerns emanating from the influx of Chinese original equipment manufacturers in the wind turbine generator market. They are also likely to mitigate potential market share loss and pressure on wind turbine generation margins.

The government, however, exempted new wind turbine-makers and said that they can import components for 50 turbines or 200 MW, whichever is lower.

This draft amendment came amid concerns about Suzlon Energy facing challenges in executing wind energy projects, as highlighted by Suzlon Group CEO JP Chalasani in an interaction with CNBC-TV18 on March 27. However, the company did bag a 100.8-MW wind power order from Sunsure Energy in this month to provide 48 wind turbine generators under engineering, procurement, and construction model.  

Inox Wind, on the other hand, had signed a 1,500-MW framework agreement with a subsidiary of CESC, Purvah Green, of which execution of the 990-MW turnkey part is in full swing with commissioning expected from FY26 onwards. Looking ahead, Inox’s management pacified investors and stated that it does not see any impact of the ongoing trade wars on their business, guiding for the company’s plan to deliver 1,200 MW in FY26.

Currently, shares of Suzlon Energy shares were up 7.4% on the NSE at Rs 59.14 while those of Inox Wind were up  4.4% at Rs 170.