Suzlon Energy’s market cap crosses Rs 1 lakh cr for first time, where is the stock headed?

Shares of Suzlon Energy hit a fresh 52-week high on Friday with the multibagger stock’s market capitalization crossing the Rs 1 lakh crore mark for the first time. Suzlon Energy stock touched the upper circuit of 5% at Rs 76.59 against the previous close of Rs 72.95 on BSE. At 2:57 pm, the market cap of the renewable energy stock stood at Rs 1.04 lakh crore. The multibagger stock also saw a high turnover of Rs 202.12 crore after 267.81 lakh shares changed hands on BSE today.

The stock is trading in a bullish zone above its 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages. This also indicates there are more buyers than sellers for the stock in both short and long term.

Today’s rally has pushed the renewable energy stock in the overbought zone, indicates its relative strength index (RSI). RSI of the multibagger stock stood at 73.8. A RSI of 70 and above indicates the stock is trading in the overbought zone.

This is the third straight session of gains for the Suzlon Energy stock. In the previous session too, the stock climbed 5% (hitting its upper circuit) at Rs 73.04 on BSE.

It has surged 297% from its 52-week low in the last one year. The multibagger renewable energy stock is currently trading at 14-year high. Suzlon Energy stock fell to a 52-week low of Rs 19.30 on August 14, 3023.

The multibagger stock has risen 291% in a year and gained 986% in three years. Earlier, Suzlon Energy stock opened at Rs 74.60 today against the previous close of Rs 72.95 on BSE. Suzlon Energy shares have a beta of 0.8, indicating low volatility in a year.

Jigar S Patel, manager at Anand Rathi Securities said, "Suzlon's stock chart appears promising, showing positive momentum. However, caution is advised as the stock is trading significantly above all major key moving averages. This suggests a reversion to the mean, where the stock could pull back to its average price levels. Moving forward, the support zone is identified at Rs 65. This range provides a potential entry point for long positions, with an anticipated upside target of Rs 80. To manage risk, a stop-loss should be placed below Rs 61 on a daily closing basis."

Laxmikant Shukla, Technical Research Analyst at YES Securities is bullish on the stock. He has a buy rating on the stock with a price target of Rs 80. One can fix a stop loss of Rs 65.

"Suzlon is now showing signs of revival after experiencing a profit booking over the past two days where prices declined from a peak of Rs 72 to a low of Rs 65. The stock has found stability near its line of parity after two days of straight fall. Additionally, the stock is still trading above all its key moving averages accompanied by the formation of bullish candles indicating a shift from a bearish to a bullish price trend. Looking at these factors, one can utilize this dip as a buying opportunity and expect a pullback move on the upside till Rs 80 with the stop loss of Rs 65 on a closing basis," said Shukla.

Brokerage Geojit said, “CAGR & ROE are expected to surpass those of the industry peers for FY24-26E. "We anticipate order inflows to be strong in this period, supported by strong government tendering and from commercial and industrial customers. We expect the revenue CAGR of 53 per cent to drive the EPS growth of 66 per cent CAGR, resulting in ROE improvement," said Geojit while assigning a 'buy' rating to the stock.

On Tuesday, Suzlon inked executed definitive agreements for the acquisition of a 76 per cent stake in Renom Energy Services, in two tranches, from the Sanjay Ghodawat Group (SGG). Renom is the largest Multi Brand Operations and Maintenance service (MBOMS) provider in the country with assets of 1,782 MW in Wind, 148 MW in Solar, and 572 MW in BOP under maintenance across customer segments.

Suzlon Energy said the first tranche of the Renom Energy deal would involve the acquisition of a 51 per cent stake for a consideration of Rs 400 crore. In the second tranche, Suzlon Energy would acquire an additional 25 per cent stake within 18 months from the acquisition of the first tranche for a consideration of Rs 260 crore.