Suzlon Energy shares trading lower despite pact with REC for securing working capital

Shares of Suzlon Energy Ltd were trading lower in the afternoon session today despite country’s largest renewable energy solutions provider Suzlon Group executing the definitive documents for securing working capital facilities with REC Limited. Suzlon will utilise the facility for meeting working capital requirements for the execution of its current order book and future order pipeline.  

However, Suzlon Energy shares slipped 2.72% to Rs 36.80 against the previous close of Rs 37.83 on BSE. Suzlon Energy stock opened flat at Rs 37.83 today. Suzlon Energy shares fell to a 52-week low of Rs 6.96 on March 28, 2023 and a 52 week high of Rs 44 on November 17, 2023. 

Total 31 lakh shares of Suzlon Energy changed hands amounting to a turnover of Rs 11.51 crore on BSE. Suzlon Energy’s market cap fell to Rs 50,098 crore on BSE.  

Suzlon Energy shares have a beta of 0.5, indicating low volatility in a year. In terms of technicals, the relative strength index (RSI) of the stock stands at 49.7, signaling it's trading neither in the overbought nor in the oversold zone. Suzlon Energy stock is trading lower than the 5 day, 10 day, 20 day, 30 day but higher than the 50 day, 100 day, 150 day and 200 day moving averages. 

Also read: Suzlon Energy shares climb 4% on bagging 100.8 MW wind power project in Gujarat

This will enable the company to ensure faster ramp-up of its operations and improve the utilisation of its installed capacities. Challenges in securing working capital for the last few years were a major constraint in increasing volumes and order book expansion. The current facility sanctioned by REC is a testament of the Company’s improved financial strength.

Himanshu Mody, Chief Financial Officer, Suzlon Group said, "We are delighted to partner again with REC Limited, one of India’s finest financial institutions with a deep understanding of power and renewable energy sectors. REC has a clear vision to support India’s ambitious renewable energy targets and has supported the company’s initiatives in the past through debt refinancing, helping us become debt free. The current facility is non-fund based, which will primarily be off-balance sheet keeping us debt-free while significantly improving commercial terms with our customer and suppliers. This facility is rolling in nature and will allow the company to execute current and future orders from its marquee customers.”

The company's consolidated net profit rose 78.11 per cent to Rs 102.29 crore in Q2 from Rs 57.43 crore in the year-ago period. Revenue from operations fell 0.92 per cent to Rs 1,417.21 crore in Q2 FY24 from Rs 1,430.38 crore in the corresponding period last year.

On a standalone basis, the company reported a net loss of Rs 5.36 crore in Q2 FY24 as against a profit of Rs 4.40 crore in the same period a year ago.

The company said it logged a higher EBITDA owing to healthier margins. At the end of September quarter, Suzlon Group's order book stood at a healthy 1,613 MW with a fair split between the S120 and S144 turbine orders, thereby giving the company a sustainable supply pipeline to work with.

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.    

Also read: Top stocks to watch on December 19, 2023: Vedanta, HCL Technologies, GMR Airports, Aurionpro Solutions, Mysore Paper Mills and more