Suzlon Energy shares trading at 52-week high; is the upside capped?

Shares of Suzlon Energy Ltd are trading at their 52-week highs on the back of a rally in the last three sessions. Market cap of the renewable energy solutions firm has reached Rs 17,415 crore on BSE after the firm said it has surpassed 20 GW in wind energy installations. The stock has gained 31% in the last three sessions. On June 7, it hit a 52-week high of Rs 14.59 on BSE.

Turnover and volumes were high for the stock with 28 crore shares changing hands amounting to a turnover of Rs 387 crore on BSE in the last session. In the current session, the stock fell 4.31% to Rs 13.78 on BSE, showing signs of profit-booking.

In terms of technicals, the relative strength index (RSI) of Suzlon Energy stock stands at 85.4, signaling it's trading in the overbought zone. The stock has a beta of 1.6, indicating very high volatility in a year. Suzlon Energy stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

On June 5, the company said 20 GW wind energy installations were accomplished through the deployment of 12,647 wind turbines across 17 countries, spanning six continents. Suzlon holds a 33 percent share of India's cumulative wind energy installations.

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Suzlon said the 20-GW wind energy installations were sufficient to supply green electricity to over 13 million Indian households.

Commenting on the outlook of the stock, Abhijeet from Tips2trades said, “"A buying frenzy in majority of the small cap stocks including Suzlon Energy has ensured a stellar rally but also extremely overbought levels 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."

Emkay Global in a note said the government of India is expected to invite annual wind capacity bids of 10 GW across eight windy states, single stage closed bids and ISTS waiver for 25 years, which offer a visible trajectory of the wind pipeline.

It noted that Suzlon has become the first Indian wind energy company to reach 20GW of worldwide wind energy installation and has a 33 per cent cumulative wind energy market share in India.

"The improvement in balance sheet is on the back of the company’s operation and maintenance service (OMS) and wind turbine generator (WTG) arms, along with industry tailwinds, restructuring, refinancing and a successful rights issue. The OMS unit caters to cumulative capacity of 16 GW (14 GW under SGSL in India) and contributed 31 per cent to overall FY23 revenue with reported EBIT (OMS) of Rs 680 crore for the year. The WTG segment supplied 664 MW capacity in FY23 and Rs100 crore Ebitda, with Ebitda margin of 2.7 per cent (1.6 GW in FY17, with EBitda margin of 19 per cent). Suzlon’s portfolio ranges from 225 kW to the newly-launched 3MW-S414 series, which contributes 51 per cent of the current order book (1,542MW)," it noted in a report titled "Winds of change," it said.

Suzlon Energy is a provider of renewable energy solutions. The company is a producer of wind turbines. It offers a range of solar energy solutions, such as solar irradiance assessment, land acquisition and approvals, infrastructure and power evacuation, supply chain, installation and commission and life cycle asset management.

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