Suzlon Energy shares crashed 22% in 5 sessions; more pain likely for this renewable energy player

Suzlon Energy Ltd shares continued their downward move for the fifth straight session in Wednesday’s trade. The stock slumped 9.26 per cent to hit a day low of Rs 53.89. At this price, it has cracked 22.25 per cent in five trading days.

A few analysts largely remained ‘negative’ on the counter. “Suzlon, at current levels, is still trading at a premium valuation. All these renewable energy stocks have taken a beating post the re-election of Donald Trump in the United States. There is a negative sentiment around all these renewable energy companies and stocks, especially solar panel firms. Even though Suzlon is into wind but I think there is some more pain which is left in the stock,” Aditya Agarwala, Co-founder, Head of Research & Investments at Invest4edu, told Business Today.

“Don’t be in a hurry to buy or average. May be closer to Rs 50 or let the stock settle down and see an uptick then it will be a good idea to buy again. I’m not looking at a target of Rs 100 in a hurry. I will be looking at targets of Rs 80-85,” Agarwala also said.

For the unversed, Trump has not been a supporter of the renewable energy sector and made claims to halt renewable energy projects on the “first day” of his potential presidency.

Kushal Gandhi, Technical Analyst at StoxBox, suggested avoiding the counter in the near term. “The ongoing corrective phase is marked by erratic movements and relatively high selling volumes, with the price action forming a lower high structure and showing no signs of recovery. We recommend avoiding Suzlon at the current market price as it is at a critical juncture,” Gandhi stated.

Recently, Suzlon’s CEO of New Business Ishwar Chand Mangal resigned after being associated with the company for 28 years. In terms of earnings, the renewable energy solutions provider reported a 95.72 per cent year-on-year (YoY) surge in its second-quarter consolidated net profit for the financial year 2024-25 (Q2 FY25).

During the quarter under review, profit came at Rs 200.20 crore as against Rs 102.29 crore in the year-ago period. Revenue from operations moved up 47.68 per cent to Rs 2,092.99 crore in Q2 FY25 from Rs 1,417.21 crore in the corresponding period last year. Suzlon said it posted consistent YoY growth in EBITDA (earnings before interest, taxes, depreciation, and amortisation) at Rs 294 crore.

As of September 2024, promoters held a 13.25 per cent stake in the company, which is slightly lower from 13.27 per cent in the previous quarter.