Suzlon Energy Ltd, a major player in the renewable energy sector, has recently faced a sharp decline in its stock price, closing down 5% to ₹75.75. This drop signifies the sixth consecutive day of losses for the company, underlining growing concerns among investors. The downturn is attributed to a warning issued by both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) regarding the company’s corporate governance practices, particularly following the resignation of an independent director.
Background of the Decline
The letter from the exchanges pointed out significant lapses in corporate governance standards, with a specific focus on the resignation of Marc Desaedeleer. His departure raised alarms about Suzlon’s compliance with essential governance norms. Following a thorough review of the company’s responses, the exchanges identified areas where governance practices could be notably improved. They emphasized that future non-compliance would not be overlooked and could result in severe repercussions for the company.
Interestingly, before this recent decline, Suzlon’s stock had recorded a remarkable increase of approximately 96.86% in 2024, reaching a peak of ₹86 just a day earlier. This surge was fueled by positive investor sentiment generated from a substantial order from NTPC Green Energy, which was anticipated to significantly boost Suzlon’s earnings visibility in the years ahead.
Today’s trading volume for Suzlon shares was remarkably high, with approximately 65.92 lakh shares traded on BSE, far exceeding the two-week average of 51.88 lakh shares. This surge in trading activity occurred alongside a market capitalization of ₹1,03,359.31 crore.
From a technical perspective, analysts are leaning towards a bearish outlook based on daily charts. Research analyst AR Ramachandran has noted that if the current downtrend persists, the stock price could drop to around ₹68 in the near future. Right now, Suzlon’s share price is trading below its 5-day, 10-day, 20-day, 30-day, and 50-day simple moving averages (SMAs), although it remains above its longer-term SMAs such as the 100-day and 200-day averages.
| Current Share Price: | ₹75.75 |
| Market Capitalization: | ₹1,03,359.31 crore |
| P/E Ratio: | 506.91 |
| P/B Ratio: | 30.09 |
| Earnings Per Share (EPS): | ₹0.16 |
| Return on Equity (RoE): | 5.95% |
| 14-Day Relative Strength Index (RSI): | 41.76 (indicating bearish conditions) |
As investors navigate these turbulent waters, all eyes are on how Suzlon will address the advisory letter and implement necessary improvements in governance. The company maintains that it does not foresee any material impact on its financial or operational performance due to these developments. Nonetheless, market sentiment remains cautious, as traders assess the risks associated with the company’s corporate governance issues.
The recent downturn, following an impressive run driven by substantial contracts, may offer a potential entry point for risk-tolerant investors looking to capitalize on lower price points. The stock’s performance in the following days will be pivotal and will largely depend on both market reactions to the advisory and the broader dynamics within the renewable energy sector, which continues to see fluctuating investor interest.
