Suzlon Energy shares down 10% in a month; should investors consider averaging?

Shares of Suzlon Energy Ltd were trading 0.20 per cent higher at Rs 63.68 in Wednesday’s trade. At this value, the stock has slipped 10.12 per cent in the past one month. Around 21.98 lakh shares were last seen changing hands on BSE. The figure was lower than the two-week average volume of 1.88 crore shares. Turnover on the counter came at Rs 13.99 crore, commanding a market capitalisation (m-cap) of Rs 187.73 crore.

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.

Analysts largely suggested that the counter may trade lower in the near term. Existing investors can consider averaging at Rs 45-47 levels, one of them said. With that being said, a decisive move beyond Rs 72-75 levels can bring the mojo back.

“If we calculate from 2020, the stock has moved from Rs 3 to Rs 80, that’s almost 25x. Now, it is taking some time to digest this big move. A few days back, it tested its 200-day moving average. So, sellers are a little aggressive in this counter and it can trade lower for some time. I don’t see an immediate rally and scope to trade at higher levels,” Aditya Arora of Adlytick Research told Business Today.

“The stock faces resistance around Rs 72 level. One can consider averaging around Rs 45-47 levels. Those holding can continue with their positions,” said market expert Kush Ghodasara.

“Suzlon is undergoing price and time corrections. There are several support levels in place, particularly in the Rs 60-58 subzone, which can provide a foundation for stability. On the higher end, if the stock can break through Rs 75 level, we may see a further upward movement. This could set the stage for renewed growth,” said Osho Krishan, Senior Research Analyst – Technical & Derivatives at Angel One.

The counter traded lower than the 5-day, 20-, 30-, 50-day and 100-day simple moving averages (SMAs) but higher than the 10-day, 150-day and 200-day SMAs. The scrip’s 14-day relative strength index (RSI) came at 45.31. A level below 30 is defined as oversold while a value above 70 is considered overbought.

According to BSE data, the company’s stock has a price-to-equity (P/E) ratio of 288.86 against a price-to-book (P/B) value of 22.38. Earnings per share (EPS) stood at 0.22 with a return on equity (RoE) of 7.81. Promoters held a 13.25 per cent stake in the company as of September 2024, which is slightly lower from 13.27 per cent in the previous quarter.