Shares of Suzlon Energy Ltd experienced a decline of 4.96% on Wednesday, closing at Rs 76.78. This drop represents a 9.03% decrease from the stock's 52-week high of Rs 84.40, which was reached on August 13. Despite this recent setback, the stock has demonstrated significant growth, rising 40.55% over the past month and nearly doubling with a 99.53% gain so far in 2024.
In its annual report for the fiscal year 2023-24, Suzlon highlighted a record order book of 3.8 GW as of June 30, 2024. This is the highest order book since 2017, with 88% of these orders coming from the company's popular 3.x MW S144 series. The company is focusing on the timely execution of these orders and effective management of its ongoing projects.
Despite the recent volatility, several analysts have advised caution for short-term investors. Gaurang Shah, Senior Vice President at Geojit Financial, noted, "We've turned positive on Suzlon over the last couple of weeks. The stock has seen significant gains, so it’s prudent to exercise caution in the short to medium term. However, the long-term outlook remains strong, bolstered by the management’s optimistic comments on business turnover."
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, highlighted the positive impact of the Centre’s push towards renewable energy on Suzlon. Bathini stated, "The company's earnings have remained stable, and profitability has shown improvement. Nevertheless, the stock’s current valuations appear stretched in the short to medium term."
For high-risk investors, Bathini recommended a cautious approach, saying, "Investors should only consider taking a position if they can tolerate high risk. Those who already hold shares should maintain a strict stop-loss following recent gains."
Kiran Jani, Head of Technical Research at Jainam Broking, provided technical insights, predicting a potential upside for the stock. Jani said, "Suzlon's stock has seen a dramatic rise from Rs 8 to Rs 80 in about 14 months. We anticipate a possible upside to Rs 90-95. However, the risk-reward ratio seems less favorable at the current price. Existing investors should hold their positions with a stop-loss set around Rs 60-55. New investors might consider waiting for the stock to consolidate and potentially buy if prices fall to Rs 60-70."
The stock is currently under the short-term ASM (Additional Surveillance Measure) framework on both the BSE and NSE due to its high volatility. It is trading below the 5-day simple moving average (SMA) but remains above other longer-term SMAs. The 14-day relative strength index (RSI) stands at 69.60, indicating that the stock is close to being overbought.
Suzlon’s stock features a price-to-equity (P/E) ratio of 488.15 and a price-to-book (P/B) ratio of 28.97. Its earnings per share (EPS) is 0.16, with a return on equity of 5.95%. As of June 2024, promoters hold a 13.27% stake in the company, a slight decrease from 13.29% in the previous quarter.
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