Suzlon Energy stock slides for 3rd straight day, plummets 4.3 per cent to 3-week low

Shares of Suzlon Energy, a leading global provider of renewable energy solutions, continued their downward trend for the third consecutive trading session on Monday. The stock fell by an additional 4.33% today, reaching ₹72.56 per share, which marks a three-week low.

The decline follows an impressive rally from April to August 2024, during which Suzlon's stock surged 87 per cent, pushing the company past a market capitalization milestone of ₹1 lakh crore.

In August, the shares briefly crossed the ₹80 mark, peaking at ₹84.29—the highest in 14 years. Since March 2023, the stock has gained an extraordinary 640 per cent, driven by strong quarterly financial performances, strategic debt reduction, and significant order wins. By the end of Q1 FY25, Suzlon's order book reached a record 3.8 GW, the largest in its history.

The current order book is set for execution up to FY26, with a significant portion anticipated to be completed in FY25. The company forecasts commissioning between 5.0 and 5.5 GW of projects in FY25, with the potential to ramp up to 6.5-7.0 GW in FY26 and further to 8.0-9.0 GW by FY27.

Following a strong turnaround in operations, both foreign and domestic brokerage firms have raised their target prices for the stock multiple times, with the stock hitting these targets earlier than expected.

Institutional investors have increased their stakes significantly; by the end of the June quarter, domestic institutional investors (DIIs) held 9.2 per cent of the stock, up from 6.3 per cent in Q4 FY24. Retail investors maintain the majority, holding 56 per cent of the company’s shares at the end of Q1 FY25.

Analysts are optimistic about Suzlon's future prospects, noting that the company is well-positioned to bid for PSU tenders, such as those from NTPC. They expect Suzlon to secure substantial orders in FY25 and beyond, aided by a reduction in competitive pressure.

Recently, the company announced its plan to acquire a 76 per cent stake in Renom Energy Services for ₹660 crore in two tranches from the Sanjay Ghodawat Group. The first tranche involves acquiring a 51 per cent stake for ₹400 crore, followed by an additional 25 per cent from stake within 18 months for ₹260 crore.

This strategic acquisition aims to establish Suzlon's market leadership in the wind energy O&M service business, with the wind energy sector expected to exceed 100 GW by 2030.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.