Suzlon Energy shares down 10% in two days; here's what technical analysts say

Shares of Suzlon Energy Ltd continued to drop in Wednesday's trading session. The stock declined 5 per cent to hit its lower circuit of Rs 21.71 over its previous close of Rs 22.85. At today's low price, the scrip has cracked 9.73 per cent in two days on BSE. The fall was much deeper on NSE as the counter slipped for the fourth straight session, trading at Rs 21.70.

The multibagger counter has gained 168.36 per cent in six months and 102.52 in 2023 so far. Around 2.52 crore shares changed hands today on BSE. This was much lower than the two-week average volume of 3 crore shares. Turnover on the counter came at Rs 55.30 crore, commanding a market capitalisation (m-cap) of Rs 29,461.18 crore.

Suzlon Energy, in a BSE filing, said, it has approved conversion of 33,14,044 partly paid-up equity shares into fully paid-up shares. "The company is in process of completing necessary formalities for corporate actions/obtaining listing and trading approvals in respect of the converted rights equity shares," it further mentioned.

Bourses BSE and NSE have put the securities of Suzlon Energy under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

During an earnings call, Himanshu Mody, Group CFO of Suzlon Energy, said, "We are ending the June quarter with a strong consolidated net worth of Rs 1,297 crore. Our gross debt for the quarter stands at Rs 1,806 crore, which is a substantial reduction from little over Rs 13,000 crore in March 2020. Our net debt as of June 30, 2023 is Rs 1,223 crores resulting in a net debt-to-net worth ratio of 0.9, which is less than 1, which is quite healthy."

On the technical front, analysts suggested that the stock looked 'bearish'. Support on the counter could be seen at Rs 21.55.

AR Ramachandran from Tips2trades said, "Suzlon Energy is bearish on the daily charts with next resistance at Rs 24.2. Investors should book profits at current levels or hold till daily support of Rs 21.55 is broken on a closing basis."

Kush Ghodasara, CMT, said, "Indicators have given bearish internal crossover in overbought zone, suggesting some more downfall. The stock may test Rs 18 in coming days. So, avoid fresh buying."

Market expert Ravi Singh said the counter looked weak on daily charts. It may decline towards Rs 17 level in the near term, he added.

The counter was last seen trading lower than the 5-day, 10-, 20-day simple moving averages (SMAs) but higher than 30-day, 50-, 100-, 150-, 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 47.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 217.55 against a price-to-book (P/B) value of 63.47.

The scrip has an analyst target price of Rs 30, Trendlyne data showed, suggesting a potential upside of 30 per cent. It has a one-year beta of 1.82, indicating high volatility on the counter.

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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