Swan Energy shares dive 20%; analysts suggest 'bearish' trend

Shares of Swan Energy Ltd slumped 20 per cent on Tuesday to hit an intraday low of Rs 534.70. The stock eventually settled 18.82 per cent lower at Rs 542.55. Even so, it has gained 92.19 per cent in the past six months.

Technical analysts largely recommended that the counter looked weak on daily charts. "Swan Energy's stock price has been bearish on daily charts with strong resistance at Rs 676. A daily close below support of Rs 551 could lead to a downward target of Rs 495 in the near term," said AR Ramachandran from Tips2trades.

"The stock looked weak on daily charts and slip towards Rs 520 level. Resistance will be at the Rs 610 zone," said DRS Finvest founder Ravi Singh.

"Support will be at Rs 525 and resistance at Rs Rs 616. A decisive close above Rs 616 level may trigger a further upside till Rs 640. Expected trading range will be between Rs 500 and Rs 640 for a month," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

Bourses BSE and NSE have put the securities of Swan 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.

The counter was last seen trading higher than the 5-day, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 10-day, 20-, 30-day and 50-day SMAs. The counter's 14-day relative strength index (RSI) came at 28.83. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 4942.18 against a price-to-book (P/B) value of 16.37. Earnings per share (EPS) came at 0.14 with a return on equity (RoE) of 0.33.

"The National Company Law Tribunal (NCLT) has directed Swan Energy-IFFCO joint venture Triumph Offshore to hold a board meeting before April 4 to discuss issues raised by minority shareholder IFFCO regarding feasibility and viability of offering services to operate vessels," news agency PTI reported.

Earlier this month, Swan Energy has announced that its subsidiary Swan LNG Pvt Ltd (SLPL) has prepaid entire loan of Rs 2,206 crore along with interest to the consortium of banks. With the prepayment, SLPL will save around Rs 250 crore in interest payment, which will strengthen Swan Group's balance sheet leading to a possible upgrade and re-rating.

Post prepayment, Swan Energy's debt has come down to Rs 1,675 crore. The external debt position of the group was Rs 4,128 crore in September 2023, which reduced to Rs 3,817 crore in December 2023. To facilitate the pre-payment, the company has lent Rs 2,210 crore to SLPL.

Swan Energy has recently raised Rs 3,000 crore through a Qualified Institutions Placement (QIP).

(With inputs from PTI)