Why is Suzlon Energy’s Share Price Falling?

Shares of midcap company Suzlon Energy fell 5% to ₹70.98 during intra-day trading on October 7, 2024, marking its 8th straight day of losses. Since September 25, the renewable energy stock has dropped over 15%.

This sharp decline followed a warning letter issued by both the BSE and NSE earlier this month. The exchanges raised concerns about Suzlon’s corporate governance after independent director Marc Desaedeleer resigned. They also warned that any future non-compliance with governance rules would be treated seriously.

Suzlon Energy responded by saying it doesn’t expect the warning to have any major effect on its financial or business operations.

Stock Price Trend

Despite the recent drop, Suzlon Energy’s stock has shown an impressive upward trend over the past year, jumping nearly 157%. Over the last five years, the stock has skyrocketed by more than 2,850%.

In 2024, the midcap stock continued its strong performance, climbing around 86% year-to-date. It has posted positive returns in seven of the 10 months this year, although it’s currently down over 11% in October after 6 consecutive months of gains since April.

Earlier this year, the stock had small corrections, falling 1.5% in February and 11% in March. However, Suzlon had a strong start to the year, with a gain of more than 20% in January.

Recent Developments

Suzlon briefly crossed the large-cap mark, reaching a market value of ₹1 lakh crore. However, after the recent stock correction, its market value has dropped to ₹97,075 crore. 

Positive Outlook

Suzlon won India’s largest wind energy order from NTPC Green Energy, a subsidiary of NTPC Limited. As part of the deal, Suzlon will install 370 wind turbine generators (WTGs) of its S144 model, each with a capacity of 3.15 MW. These turbines will be used for projects in Gujarat for NTPC Renewable Energy and Indian Oil NTPC Green Energy Pvt Ltd.

Financial Highlights

In Q4 results, renewable energy provider Suzlon Energy reported a nearly 21% drop in consolidated net profit to ₹254 crore for the March quarter, mainly due to certain exceptional items. The company posted a net profit of ₹320 crore in the same quarter last year. However, total income rose to ₹2,207.43 crore from ₹1,699.96 crore in the previous year. For the full fiscal year 2023-24, net profit also fell to ₹660 crore from ₹2,887 crore the previous year.

Despite this, total income for the fiscal year increased to ₹6,567.51 crore from ₹5,990.16 crore. Suzlon noted that its profit after tax (PAT), before exceptional items, for the March quarter surged 411% year-on-year to ₹281 crore. As of May 24, 2024, the company’s cumulative orders stand at 3.3 GW, including an order book of 2,929 MW as of March 31, 2024, and additional orders of 402 MW secured afterwards.

About Suzlon Energy

Suzlon is a top global provider of renewable energy solutions and a fully integrated manufacturer of wind turbine generators (WTGs). The company produces, installs, and provides operation and maintenance (O&M) services for all its WTG sales. Suzlon’s operations include designing and manufacturing key components like rotor blades, towers, generators, control equipment, gears, and nacelles. 

On October 07, 2024, Suzlon Energy’s share price opened at ₹75.64, touching the lowest price of ₹70.93 as of 02:58 PM. 

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.