Suzlon Energy gets 'advisory cum warning' letter from BSE, NSE; stock extends fall

Suzlon Energy Ltd on Tuesday received an 'advisory cum warning' (SiC) letter from bourses BSE and NSE. "On review of the responses and documents received from the company on the issues raised by the resigning independent director, it was identified that there seem to be few instances where better corporate governance practices could have been followed by the company," exchanges stated.

This was about the disclosure submitted by Suzlon on June 8, 2024, concerning the resignation of Marc Desaedeleer as independent director where the resignation letter highlighted that the corporate governance standards did not meet the expectations.

"The aforesaid non-compliance on your part is viewed seriously. You are hereby warned and advised to be careful in future, exercise due caution and initiate corrective steps to avoid recurrence of such lapses so as to ensure due compliance with the applicable provisions of SEBI LODR. Any aberration in future will be viewed seriously and appropriate action would be initiated," BSE & NSE also said.

Suzlon, on its part, said that the advisory/warning letter has no material impact on the financial, operation or other activities of the company.

On the stock-specific front, Suzlon shares extended their fall for the fifth consecutive session on Tuesday. The stock settled 0.45 per cent lower at Rs 79.73 today.

Morgan Stanley recently downgraded Suzlon to 'equalweight' from its earlier rating of 'overweight'. However, the international brokerage has raised its target price on the wind energy solutions provider's stock to Rs 88 per share from Rs 73 earlier.

"Suzlon is up 120 per cent in the past 6 months, outperforming Nifty by 93 per cent, driven by a strong increase in order book and improved balance sheet/cash flow from operations. But we now see risk reward as more balanced and would await for stronger execution vs our base case to become more constructive again," the international brokerage stated.

Technically, support on the counter be seen in the Rs 79-78 range. And, a close below the said zone can cause further downside.

"Support will be Rs 78 and resistance Rs 83. A decisive close above Rs 83 level may trigger a further upside towards Rs 86. The expected trading range will be between Rs 76 and Rs 86 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

"Suzlon Energy stock price is bearish on daily charts with strong resistance at Rs 86. A daily close below support of Rs 79 could lead to a downward target of Rs 68 in the near term," said Sebi-registered research analyst AR Ramachandran.

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.