Sat. Dec 2nd, 2023
    Suzlon Energy Share Price Continues to Experience Selling Pressure

    Suzlon Energy’s share price has taken a hit recently, as it witnessed a second consecutive session of selling pressure. The stock hit its 5 percent lower circuit of ₹39.28 on the Bombay Stock Exchange (BSE) during morning trade on Tuesday, November 21. This decline follows a 2.20 percent drop in the previous session, breaking a winning streak of six consecutive sessions.

    It is worth noting that Suzlon Energy’s stock had experienced significant gains in the last few months. In fact, it reached its 52-week high of ₹44 on November 17, marking a surge of nearly 29 percent in November alone. The market responded positively to rumors of the company’s potential inclusion in the Association of Mutual Funds in India’s (AMFI) midcap category during a reshuffle in January 2024. Additionally, the anticipation of Suzlon Energy being added to the MSCI Global Standard Index further fueled the surge.

    In terms of financial performance, Suzlon Energy posted a 45 percent year-on-year jump in net profits to ₹102 crore in the second quarter of the fiscal year 2023-24. However, the company’s revenue experienced a marginal decline to ₹1,417 crore during the same period, down from ₹1,430 crore in the previous year. Despite this decline, the company’s numbers remained positive due to strong gains in the earnings before interest, taxes, depreciation, and amortization (EBITDA). The EBITDA saw a significant increase of 32.6 percent, reaching ₹225 crore compared to ₹169.7 crore in the previous year.

    While technical experts recommend profit booking at the current juncture, the overall structure of Suzlon Energy’s stock remains positive. According to Gaurav Bissa, VP of InCred Equities, the stock has shown multiple breakouts on lower levels with strong volumes and has crossed major swing highs. However, momentum indicators like the relative strength index (RSI) suggest a small pullback could be on the horizon. Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, also advises trail stop-loss strategies for those already holding the stock.

    Overall, Suzlon Energy’s share price fluctuations reflect a mix of profit booking and market speculation. As the company continues to navigate market dynamics and sustain its positive financial performance, investors will be watching closely to see how it fares in the coming months.

    Frequently Asked Questions (FAQ)

    1. What caused the recent decline in Suzlon Energy’s share price?

    The recent decline in Suzlon Energy’s share price can be attributed to selling pressure in the market, with the stock hitting its lower circuit.

    2. What factors contributed to Suzlon Energy’s previous surge?

    Suzlon Energy’s previous surge in share price was influenced by speculation of its potential inclusion in AMFI’s midcap category during a reshuffle and the anticipation of it being added to the MSCI Global Standard Index.

    3. How did Suzlon Energy perform financially in the second quarter?

    In the second quarter, Suzlon Energy reported a 45 percent year-on-year increase in net profits but experienced a slight decline in revenue. However, the strong gains in EBITDA bolstered the company’s positive numbers.

    4. What do technical experts recommend regarding Suzlon Energy’s stock?

    Technical experts suggest some profit booking in the stock at the current juncture due to potential indicators of a small pullback. However, the overall structure of the stock remains positive.

    5. What should investors consider when holding Suzlon Energy’s stock?

    Investors should closely monitor the stock’s performance and consider implementing trail stop-loss strategies to manage potential risks. It is also important to stay updated on market trends and the company’s financial performance.