Suzlon Energy shares approach 52-week high but experts see more upside; here’s why

Shares of Suzlon Energy Ltd have recovered 187% from their 52-week low hit in July last year. The renewable energy stock fell to a yearly low of Rs 5.43 on July 28, 2022. It touched an intraday high of Rs 15.60 in the current session, delivering 187.29% returns from the scrip’s 52 week low on BSE. The stock has been rising for the last four sessions. With today’s rally, the stock has approached the 52-week high of Rs 15.76, reached on June 13, 2023.

Suzlon Energy shares rose nearly 4% to an intraday high of Rs 15.60 today. The stock ended 4.83% higher to Rs 14.76 on Wednesday. In the current session, market cap of the firm rose to Rs 19,005 crore. The stock has surged 44% in the last one month and gained 145% in a year. The stock has rallied 228% in three years.

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In the current session, turnover and volumes were high for the stock with 358.65 lakh shares changing hands amounting to a turnover of Rs 55.43 crore on BSE.

In terms of technicals, the relative strength index (RSI) of Suzlon Energy stock stands at 67.1, signaling it's trading neither in the overbought nor in the oversold zone. The stock has a beta of 1.5, 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.

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Despite the current leg of rally, experts see more upside in the renewable energy stock.

Abhijeet from Tips2trades said, “After a brief correction,  Suzlon Energy looks bullish on the Daily charts with strong support at Rs 13.25. A daily close above resistance of Rs 15.8 could lead to Rs 17.8 in the coming days."

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has witnessed a decent spurt in the last two months moving past the crucial resistance zone of Rs 12 level to indicate a breakout and has touched the peak zone of Rs 15.60 level where it has witnessed profit booking and slipped to some extent. Once again a fresh momentum has started indicating a higher bottom formation pattern on the daily chart and with strength seen, is anticipated to move past the  Rs 15.75 zone in the coming days. The next target expected is near Rs 19.50 - Rs 20 levels with Rs 13.70 maintained as the support zone from here on."

ICICI Securities has initiated coverage on Suzlon Energy with a buy call. It has assigned a target price of Rs 22 for the renewable energy stock.

"We believe Suzlon is best equipped to benefit from industry tailwinds. We expect a sharp uptick in earnings FY24E onwards. Suzlon has reduced leverage by restructuring its debt and by raising money through a rights issue. As a result, leverage is now merely 1x debt/EBITDA. Initiate with BUY and a target price of Rs 22 per share (assigning a multiple of 24x FY25E EPS)," the brokerage said.

Explaining the rationale behind its stance, it said, "The lowest-cost solution for an optimal decarbonised grid is a mix of wind, solar and battery storage capacities. Wind generates powerin monsoon and nights when solar generation is low. Also, we believe higher wind will lead to lower battery storage requirement for a decarbonised grid."

"Suzlon has enjoyed a market share of 33%in India’s domestic market (based on total installations)(source: company). It has 20GW of operational wind power capacity globally and is well ahead of its competitors. Note that its existing order book at 1.5GW bodes well for execution through the next two years," added the brokerage.

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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