The stock hit its 52-week low of Rs 46 in April this year and has since rebounded to around Rs 66, but it still trades 23% below its September peak.
Suzlon’s massive rally is now showing signs of fatigue as in the last six months, the stock has navigated a phase of consolidation, Om Ghawalkar, Market Analyst, Share.Market.
Ghawalkar said that its RSI also reveals a bearish divergence trap while the MACD and signal lines are converging, hinting at a potential shift in momentum. A tri-star pattern has also emerged, reflecting a period of market indecision, he added.
Another momentum indicator MFI is hovering around 75 and this puts the stock into an overbought zone, hinting at a likely pullback. A number above 70 is seen as overbought while below 30 is considered oversold.
The stock of Suzlon Energy has also displayed high volatility, with 1-year beta hovering at 1.5, according to Trendlyne.
Suzlon’s turnaround story
Listed in October 2005, Suzlon’s lifetime high is Rs 430.92 on January 9, 2008 while its lifetime low is Rs 1.51 hit on March 26, 2020, during the Covid-19 market crash.
The picture has completely changed and Suzlon is now a turnaround story, backed by financial restructuring. The renewable energy company is net cash positive now and is a market leader in its segment.
This has reflected in the stock’s performance as there are only 23 stocks which have higher returns than Suzlon Energy over a three-year period. ETMarkets has considered only those stocks which have a market capitalisation of Rs 5,000 crore or more.
Some of the most traded stocks that have given superior returns include Mazagon Dock Shipbuilders, Waaree Renewable Technologies, Force Motors, Cochin Shipyard, Rail Vikas Nigam (RVNL), Garden Reach Shipbuilders & Engineers ( GRSE) and Zen Technologies.
Tailwinds – Stock’s next leg of rally backed by 6 reasons:
1. Technicals matter
ETMarkets.comA golden crossover between the 50-day and 200-day moving averages, signals a strong primary uptrend, while the 10 and 21 day moving averages suggest that shorter-term momentum remains intact.
Suzlon’s is trading above its 50-day and 200-day simple moving averages (SMAs) of 63 and 62, respectively, according to Trendlyne.
The stock also scores high on these 5 factors namely price trends, fair valuation, market perception, risk levels, and financial strength, Ghawalkar added.
2. Restructuring: The company’s restructuring exercise has helped it reduce its debts, making it net cash positive at Rs 830 crore, Anand Rathi said in a note.
“Suzlon’s financial health is further bolstered by a substantial reduction in debt, leaving the company nearly debt-free and enhancing its resilience to market fluctuations,” Ghawalkar added.
3. Order book: Its record-high 5.6GW order book—3.6x FY25 execution—ensures robust assurance, says Anand Rathi.
Ghawalkar said that the order book provides robust revenue visibility for the coming years.
4. Energy outlook: Demand for electricity is expected to rise at a steady 5-7% over 2025-30, with the greater emphasis on non-fossil-fuel generation (500GW renewables capacity), MNRE targets 10GW annual wind-capacity addition till 2030.
5. Game changer: Apart from the above factors, the rollout of the advanced S144 platform, underscores Suzlon’s constructive outlook.
6. Earnings: In FY25, the company’s consolidated revenue soared 67% year-on-year to more than Rs 10,851 crore, while net profit surged 214% to Rs 2,072 crore. The Earnings Before Interest, Taxes, Depreciation (EBITDA) margins rose to 17.1%.
The company’s operational efficiency is evident in higher contribution margins and improved cash reserves, positioning it well for future expansion, Ghawalkar said.
Stock to buy
Brokerage Anand Rathi has initiated a coverage with a ‘Buy’, pegging the price target at Rs 81, valuing it at 40x FY27e PE.
“The company’s journey from a challenging past to a position of strength highlights its adaptability and commitment to driving India’s clean energy transition. As Suzlon continues to innovate and expand, it remains a key player to watch in the evolving landscape of renewable energy,” the Share.market expert said.
The stock was in news on Friday after Motilal Oswal Financial Services (MOFSL) gave its highest-ever target price for the stock at Rs 82, believing that Suzlon Energy will benefit from local content mandates, a strong order book ensuring revenue visibility, and improved execution via land acquisition and EPC expansion.
(Inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
