Suzlon Energy Reaches 52-Week High with 291% Annual Gain; Time to Buy?

On July 24, shares of Suzlon Energy surged by 5%, reaching a 52-week high of ₹55.70 on the National Stock Exchange (NSE), marking the third consecutive session of gains. By 12:49 pm IST, the shares were trading 3.4% higher at ₹54.83 on the NSE. Over the past year, the stock has delivered impressive returns, soaring 291% and nearly quadrupling investors' money.

The stock has attracted significant investor interest after multiple brokerages issued bullish recommendations, highlighting the company's impressive debt reduction, efficient working capital management, and positive outlook.

Suzlon Energy share price is currently experiencing a pattern of higher highs and higher lows on the daily chart, recently achieving a new 52-week high.

"Recently, the counter has decisively surpassed the swing high of 50.60 to claim new highs and seems poised to continue its upward march. On the technical front, the breakout zone of 50 should now provide a cushion to short-term blips, while the strong support lies around the 48-46 subzone", said Osho Krishan, Senior Analyst, Technical & Derivative Research, at Angel One. 

"Simultaneously, the technical parameters have reached the over-bought terrain; hence, caution is warranted at elevated zones. The undertone remains bullish and dips should augur well to accumulate the counter," Krishan told Moneycontrol.

According to domestic brokerage Nuvama Institutional Equities, Suzlon Energy is poised to maintain its leadership in wind turbine generator (WTG) and turnkey EPC (Engineering, Procurement, and Construction) execution. This is expected to result in a 21% order book (OB) and a 61% profit after tax (PAT) compound annual growth rate (CAGR) over the fiscal years 2024 to 2027.

The company is now well-positioned to regain its previous highs and sustain its leadership, Nuvama Institutional Equities stated. The brokerage expects Suzlon Energy to maintain a market share of around 30% and to see a strong increase in order intake and execution. Consequently, the brokerage maintained a 'buy' rating on the stock with a target price of ₹52, which the stock has already surpassed.

"The overall trend for Suzlon is bullish, with confluence from various technical indicators reinforcing the optimistic outlook. Given these signals, there is potential for the stock to achieve a target price of ₹63 & ₹65 in the near term," said Mandar Bhojane, Equity Research Analyst, Choice Broking.

"It is advisable to consider buying on dips, particularly around ₹52, capitalizing on potential retracements in the stock price. To prudently manage risk, implementing a stop-loss (SL) at ₹49.4 is recommended. This precautionary measure is crucial to safeguard investments in the event of an unexpected market reversal," he added.

Morgan Stanley recently initiated coverage on Suzlon with an 'Overweight' rating and a target price of ₹58.5 per share. The firm highlighted Suzlon as a significant beneficiary of India's shift towards greener energy sources. Morgan Stanley noted that Suzlon is well-positioned to capitalize on this transition and could potentially secure wind orders totaling approximately 32 GW, or $31 billion, over the next five years.

According to the international brokerage, Suzlon's earnings are expected to grow at a 57% compound annual growth rate (CAGR) from FY24 to FY27. Morgan Stanley analysts noted that Suzlon 2.0 is well-positioned to benefit from India's energy transition.

According to Bloomberg data, all five analysts that track Suzlon Energy have a 'buy' recommendation on the stock.