Suzlon Energy Ltd’s shares faced continued pressure, extending their decline for the fifth consecutive trading session. The stock closed at ₹79.73, down 0.45% from the previous day. This downward trend comes after the company received an ‘advisory cum warning’ letter from both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) regarding corporate governance issues raised by a resigning independent director.
Main Points
Latest Developments
Corporate Governance Concerns
The advisory letter highlighted lapses in corporate governance practices within Suzlon. The exchanges noted that the company’s responses to concerns raised by Marc Desaedeleer, who resigned as an independent director, indicated areas where better practices could have been implemented. While Suzlon stated that this advisory has no material impact on its financial or operational activities, the market reacted negatively to these developments.
Despite the recent downturn, Suzlon shares have shown remarkable growth over the past six months, surging approximately 120%. This performance has outpaced the Nifty index by 93%. Analysts attribute this growth to a strong order book and improved cash flow from operations. However, Morgan Stanley recently downgraded its rating on Suzlon from ‘overweight’ to ‘equal weight’ while raising its target price from ₹73 to ₹88 per share, indicating a more cautious outlook moving forward.
From a technical perspective, the stock is currently facing critical support levels between ₹79 and ₹78. A close below this range could lead to further declines, potentially targeting ₹68 in the near term. Conversely, resistance is identified at ₹83; a decisive close above this level could open up further upward movement towards ₹86. Analysts suggest that traders should monitor these levels closely as they indicate potential volatility in price action.
Key Price Levels
| Price Level | Action |
|---|---|
| Support | ₹79 – ₹78 |
| Resistance | ₹83 |
| Potential Downside Target | ₹68 |
| Potential Upside Target | ₹86 |
Investor sentiment has been mixed following the recent news. The stock’s performance has been buoyed by significant contracts, including a recent order for 1,166 MW from NTPC Green Energy. This order is expected to enhance earnings visibility for FY26-27 and marks a return to securing public sector orders after previous ineligibility due to negative net worth.
Trading Volume Insights
In recent trading sessions, Suzlon has experienced high volumes with nearly 13.94 crore shares traded on the NSE. This surge in activity indicates strong investor interest despite the negative news surrounding governance issues.
Several analysts have weighed in on Suzlon’s current situation:
- Jigar S Patel, Senior Manager at Anand Rathi, suggests that traders should watch for a close below ₹79 as it could signal further downside.
- AR Ramachandran, a Sebi-registered research analyst, notes that the stock remains bearish on daily charts with strong resistance at ₹86.
Market Capitalization and Financial Metrics
As of now, Suzlon Energy Ltd boasts a market capitalization of approximately ₹1,14,236 crore. The stock has shown impressive returns over three years, generating over 1216% compared to Nifty’s 49% during the same period
