Suzlon Energy shares lose steam after 3-day sharp run, slip 7% today; what's next: Rs 9 or Rs 16?

Suzlon Energy shares on Thursday failed to carry forward the momentum, pausing their 3-day sharp rising trend. The stock today fell 7.08 per cent to close at Rs 13.38. The stock had settled at Rs 14.40 in the previous session after it touched a 52-week high (intraday) of Rs 14.59.

In an earnings call, Himanshu Mody, Group CFO of Suzlon Energy, said, "For FY24 (2023-24), I can confirm that at the consolidated level, there will be no tax outgo because we would be utilising our carry forward losses. And the total carry forward losses -- on the balance sheet as of today is exceeding Rs 2,000 crore."

"Compared between FY22 to FY23, the interest cost reduction (was) about 44 per cent. It certainly won't be to that extent (this year) because there may be working capital facilities, which are by way of non-fund-based limits, which we will be ramping up for the execution of these orders," Mody further stated.

Bourses BSE and NSE have put the securities of Suzlon Energy under the short-term ASM (Additional Surveillance Measure) framework. The parameters for shortlisting securities under ASM include high-low variation, client concentration, number of price band hits, close-to-close price variation and price-to-earnings (P/E) ratio. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Earlier this week, Suzlon Group announced that it has crossed the 20GW wind energy installations milestone through 12,467 wind turbines installed across 17 countries spanning six continents. According to the Ministry of New and Renewable Energy, India currently has a total renewable energy capacity of 168.96 GW (as of February 28, 2023) with about 82GW at various stages of implementation and about 41GW under tendering stage. This includes 64.38GW solar power, 51.79GW hydropower, 42.02GW wind power and 10.77GW biopower.

Suzlon reported a consolidated net profit of Rs 320 crore for the March 2023 quarter, led by lower expenses. It recorded a consolidated net loss of Rs 193 crore in Q4 FY22. In addition, Suzlon reduced its net debt by 79.64 per cent to Rs 1,180 crore in Q4 FY23 compared to Rs 5,796 crore in the corresponding period last year.

On technical setup, analysts largely suggested that the stock may witness some profit booking after a sharp rise. The counter has jumped 60.05 per cent in the past one month.

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has witnessed a decent rise in the past 2-3 weeks gathering momentum with huge volume participation but has resisted near Rs 14.50 zone with some profit booking seen. One can keep the stop loss near Rs 12.40 levels, below which again the bias can weaken and further slide could be expected. As of now, the overall trend is maintained positive as long as 12.40 levels are sustained."

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One, said, "Suzlon has witnessed a strong spurt in the last couple of trading weeks, wherein it soared over 60 per cent in just three weeks. With the recent price movement, the stock has witnessed a strong breakout around Rs 11-odd zone. However, post the stellar vertical rally, the possibility of cool-off should not be ruled out, though the sentiments are likely to remain bullish-biased. As far as levels are concerned, the breakout zone of Rs 11-odd level is expected to provide a cushion from any short-term blip, followed by sacrosanct support of 200-SMA (Simple Moving Average) around Rs 9. While on the contrary, till the stock sustains above the breakout zone, it is highly anticipated to continue its upsurge with immediate resistance placed around the 15-16 zone in the comparable period."

AR Ramachandran from Tips2trades said, "A buying frenzy in a majority of the small-cap stocks including Suzlon Energy has been witnessed. The stock is extremely overbought on the daily charts with strong resistance at Rs 15.15. Investors should keep booking profits at current levels as a fall till support of Rs 10.3 looks likely in the coming days."

VLA Ambala, Research Analyst at Stock Market Today, said, "The stock price could witness a pullback between Rs 11 to Rs 12.50 levels. Major support on the counter could be seen at Rs 7."

Meanwhile, Indian equity benchmarks settled lower today, halting their four-day winning run due to profit booking.

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