Shares of Suzlon Energy Ltd on Wednesday paused their five-day winning run and settled 4.96 per cent lower at Rs 76.78. At this price, the stock has fallen 9.03 per cent from its one-year high value of Rs 84.40, a level seen earlier on Monday this week (August 13). Despite the mentioned fall, the counter has gained 40.55 per cent in the past one month and 99.53 per cent in 2024 so far.
The renewable energy solutions provider, in its annual report for 2023-24 (FY24), said, "We recorded 3.8 GW in order book by June 30, 2024, the largest-ever since 2017, of which 3.3 GW (88 per cent) was contributed by orders for Suzlon's highly successful 3.x MW S144 series."
Going forward, our focus will remain on on-time execution of our existing order book and completing the internal and external projects related to operations and management, it also said.
On the stock-specific front, a few analysts suggested a 'cautious' approach for the near term, given the counter's recent outperformance and stretched valuations. They also mentioned that the long-term story remains intact for investors.
"We've turned positive on Suzlon over the last couple of weeks. The stock has rallied quite a bit and one needs to be cautious in the short- to medium-term perspective. For the longer term, the management has given some strong commentary, in terms of turnover in the businesses," Gaurang Shah, Senior VP at Geojit Financial told Business Today TV.
"There are positive tailwinds for Suzlon, given the Centre's renewable energy push. In terms of earnings, the company's topline remained flattish but profitability has increased. Although, the valuations looked a bit stretched from a medium- to short-term perspective at present," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
"Investors with a high-risk appetite should only consider taking a position in the stock. Those holding should maintain a strict trailing stop loss after the recent outperformance," Bathini added.
"Looking at Suzlon's historical charts, it has still a long way to go. Currently, the stock price has rallied from Rs 8 to Rs 80 in around 14 months. We can expect an upside target of Rs 90-95 levels. But, the risk-reward ratio is not favourable at current market price. Those holding can continue with their positions, keeping a stop loss around Rs 60-55. For fresh buying, one should wait for some time and let the counter consolidate. Any price corrections towards Rs 60-70 can be used as an opportunity to add," said Kiran Jani, Head of Technical Research at Jainam Broking.
Bourses BSE and NSE have put the securities of Suzlon Energy under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.
The counter traded lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 69.60. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a price-to-equity (P/E) ratio of 488.15 against a price-to-book (P/B) value of 28.97. Earnings per share (EPS) stood at 0.16 with a return on equity of 5.95.
As of June 2024, promoters held a 13.27 per cent stake in the company, which is slightly lower from 13.29 per cent in the previous quarter.
Meanwhile, Indian equity benchmarks will remain closed on Thursday (August 15) to mark Independence Day. The domestic bourses will reopen on August 16, 2024 (Friday).