Suzlon Energy shares extend fall on tax penalty; here's what analysts say

Shares of Suzlon Energy Ltd continued to fall on Friday. The stock settled 0.81 per cent lower at Rs 42.68. Despite the mentioned drop, the multibagger scrip has gained 422.40 per cent in a year.

The renewable energy solutions provider, in a recent BSE filing, said, "This is to inform that GST, Tamil Nadu has proposed a penalty upon the company. Suzlon has paid the penalty and is in the process of challenging it with the appropriate authorities." The penalty order was worth Rs 98,79,340.

Last week, the I-T department had issued two income tax penalty orders to it for financial year 2015-16 (FY16) and FY17. The two penalty orders were valued at Rs 87.59 crore and Rs 172.76 crore, respectively.

Suzlon also mentioned that it was in the process of challenging penalty orders.

On technical setup, analysts shared mixed views on the counter. Immediate support will be at the Rs 41-40 zone.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock has recovered significantly from the Rs 35.50 zone to move past Rs 41.20. There was some resistance near Rs 44.50. Near-term support is visible at Rs 40. With the overall bias remaining positive, one can anticipate for an upward move for next higher targets of Rs 47 and Rs 51 levels, keeping stop loss at Rs 40."

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked strong on charts. It may see an upside target of Rs 45 in the near term. Keep stop loss at Rs 38."

AR Ramachandran from Tips2trades said, "Suzlon Energy looks slightly bearish on daily charts with strong resistance at Rs 44.6. A daily close below support of Rs 41.5 could lead to a downward target Rs 37 in the near term."

Bourses BSE and NSE have put the securities of Suzlon under the long-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.