Suzlon Energy shares extend fall after hitting 52-week high, plunge 6% today; here's why

Shares of Suzlon Energy Ltd continued to slip for the second consecutive session in Wednesday's trade. The stock resumed fall in the previous session after hitting its 52-week high levels. Today, it cracked 6.35 per cent to hit a day low of Rs 14.15 over its previous close of Rs 15.11. This was after the company announced that it has approved the conversion of 92,65,406 shares with a face value of Rs 2 (and Re 1 paid-up) into fully paid-up equity shares with a face value of Rs 2 (and Rs 2 paid-up) aggregating to Rs 2,31,63,515.

"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," Suzlon said in an exchange filing.

"As on date, the paid-up capital of the company is Rs 24,88,21,24,180 divided into 12,40,90,37,097 fully paid-up equity shares having a face value of Rs 2 each and 6,40,49,986 partly paid-up equity shares having a face value of Rs 2 each with Re 1 each," it further stated.

Bourses BSE and NSE have put the securities of Suzlon Energy under the short-term ASM (Additional Surveillance Measure) framework. The parameters for shortlisting securities under ASM include high-low variation, client concentration, number of price band hits, close-to-close price variation and price-to-earnings (P/E) ratio. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Suzlon Energy reported a consolidated net profit of Rs 320 crore for the March 2023 quarter, led by lower expenses. It recorded a consolidated net loss of Rs 193 crore in Q4 FY22. In addition, Suzlon reduced its net debt by 79.64 per cent to Rs 1,180 crore in Q4 FY23 compared to Rs 5,796 crore in the corresponding period last year.

Turnover on the counter stood at Rs 79.32 crore on BSE today, commanding a market capitalisation (m-cap) of Rs 17,715.58 crore.

On technical setup, the stock was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 69.31. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 8.71. It has a price-to-book (P/B) value of 37.78.

The scrip has a one-year beta of 1.53, indicating high volatility. Support on the counter could be seen at Rs 13.30.

AR Ramachandran from Tips2trades said, "Suzlon is bearish and also overbought on the daily charts with strong resistance at Rs 15.75. A daily close below support of could lead to Rs 13.30 could lead to targets of Rs 11.30-10.50 in the near term."

Vaibhav Kaushik, Research Analyst at GCL Broking, said, "After the government announced that it would float India's first offshore wind energy tender very soon, the stock is showing electrifying performance and has already jumped more than 70 per cent in a month. So, buying on dips is advisable for a target of Rs 18 while keeping a stop loss placed at Rs 9. Buy near Rs 11."

Meanwhile, Indian equity benchmarks traded higher in late deals today, led by gains in consumer, energy and metal stocks.

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