Suzlon Energy Enters Bear Market as Stock Sees Sharpest Drop Since December 2022

Introduction

Suzlon Energy, a global leader in renewable energy solutions, has recently faced a significant stock price tumble. On November 13, 2024, its Suzlon Energy share price fell by 8.5%, marking the steepest single-day drop since December 2022. The stock has now nosedived around 38% from its September high of Rs 86.04, officially pushing it into bear market territory. The decline also sees Suzlon’s share price slipping below its 200-Day Exponential Moving Average (DEMA), a key indicator closely watched by long-term investors.

CEO Resignation Adds Pressure

Amid the stock’s downward trend, the resignation of Ishwar Chan Mangal, Suzlon’s CEO of New Business and a prominent member of the senior management team, has amplified investor concerns. His departure leaves a gap in the leadership at a time when Suzlon is handling strategic orders and transitions. Mangal’s resignation raises questions about continuity in Suzlon’s ambitious growth and transformation strategies.

Q2FY25 Performance: Strong Fundamentals Amid Market Pressures

Despite the recent bearish trend in Suzlon’s stock price, the company’s Q2FY25 performance shows robust growth:

• Record Order Wins: Suzlon signed India’s largest-ever wind energy order, amounting to 1,166 MW from NTPC Green Energy Limited, highlighting its leadership in the wind energy sector.
• Impressive Profit Growth: With a 96% year-over-year (YoY) increase in profit after tax (PAT) to Rs 201 crore, Suzlon’s profitability reflects the company’s operational strength.
• High Margins: Strong margins in Q2 underscore Suzlon’s effective cost management and execution capabilities, despite challenging market conditions.

Key Strategic Moves Driving Long-Term Growth

Suzlon has recently undertaken several strategic initiatives to support long-term growth and strengthen its position in the renewable energy sector:

1. Major Wind Energy Order from NTPC
   Suzlon signed a landmark 1,166 MW wind energy order with NTPC Green Energy Limited, encompassing the installation of 370 wind turbine generators with advanced Hybrid Lattice Tubular (HLT) technology. This order, spread across Gujarat, emphasizes Suzlon’s role in driving India’s clean energy transition.
2. Acquisition of Renom Energy Services
   Suzlon has acquired a 76% stake in Renom Energy Services Private Limited, making it the largest multi-brand operations and maintenance service provider in India. This acquisition strengthens Suzlon’s service offerings across wind, solar, and balance-of-plant (BOP) segments.
3. Decarbonisation Initiatives
   Suzlon secured a major 400 MW order from JSP Green Wind, representing the largest Commercial and Industrial (C&I) segment win for the company. This reinforces Suzlon’s leadership in India’s renewable energy space, especially in aiding decarbonization of high-emission sectors.
4. Asset Monetization Strategy
   As part of its strategy to become asset-light, Suzlon monetized its corporate headquarters, ‘One Earth,’ for Rs 440 crore. This move aims to free up capital, allowing Suzlon to fund its expanding order book with internal resources and focus on growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.