- Suzlon shares fell 1.79% to Rs 37.87, down after an 11.76% rally last week
- The stock is down 36.56% over the past year and trades near its 52-week low
- Q2 revenue rose 26% to Rs 4,869 crore, but net profit dropped 69.2% YoY
Suzlon Energy shares slipped in early trade on Friday, November 6, giving up some of their recent gains even as the stock remained among the closely watched renewable energy counters after a sharp correction over the past year.
The shares have gained nearly 12% in a week, but remain down more than 36% over the past 12 months.
Suzlon shares fell as much as 2.35% to an intraday low of Rs 37.65 on Friday. At 9:38 am, the stock was trading 1.79% lower at Rs 37.87, while the BSE Sensex was up 0.28% at 79,549.
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The fresh decline comes after an 11.76% rally over the past week. Suzlon has gained 1.15% over two weeks, but is down 3.35% in a month, 21.55% over three months and 30.38% over six months. The stock has declined 27.93% year-to-date and 36.56% over the past year.
Suzlon's 52-week high stands at Rs 61.45, while its 52-week low is Rs 33.21. At the current market price, the company's market capitalisation stood at around Rs 52,003 crore.
Suzlon Shares: Why Is The Post-Results Rally Losing Steam?
Veteran market expert Deepak Jasani said Suzlon's initial post-results rally failed to sustain because investors were not fully convinced about the company's growth prospects.
Jasani said his review of the company's November 4 earnings call transcript suggested that investors were not particularly happy with its outlook. He added that some profit booking followed the initial surge, while the quarterly numbers were also not particularly encouraging.
Jasani also pointed to the muted recovery in midcap and smallcap stocks, despite benchmark indices extending their winning streak to a seventh consecutive session on Friday. The lack of broader market participation, he said, could also be weighing on stocks such as Suzlon.
Suzlon Shares: What Are Trading Volumes Indicating?
The stock's traded quantity stood at 11.45 lakh shares at the time of the snapshot, compared with its two-week average quantity of 79.07 lakh shares, indicating relatively subdued trading activity.
Suzlon's consolidated trailing twelve-month earnings per share (EPS) stood at Rs 1.64, with a price-to-earnings (P/E) ratio of 23.04. Its return on equity (ROE) was 81.19%, BSE data showed.
Suzlon Q2 Results: Revenue Rises 26%, EBITDA Margins Contract
Suzlon reported its September-quarter results on October 29, with consolidated net profit declining 69.2% year-on-year (YoY) to Rs 394 crore. However, the sharp fall largely reflected a high base in the year-ago quarter, when the company recognised a deferred tax asset worth Rs 891 crore.
Excluding this impact, net profit increased 1.3% to Rs 394 crore from Rs 389 crore in Q2FY26, according to the company's earnings presentation.
Revenue grew 26% to Rs 4,869 crore, while earnings before interest, taxes, depreciation and amortisation (EBITDA) remained almost flat at Rs 720 crore against Rs 721 crore a year ago. EBITDA margin contracted to 14.8% from 18.6%, while profit before tax declined to Rs 518 crore from Rs 563 crore.
Operationally, Suzlon recorded its highest-ever India deliveries of 710 megawatts (MW), compared with 565 MW in the corresponding quarter last year. It commissioned 454 MW during the quarter.
The company's order book stood above 6 gigawatts (GW), while order intake exceeded 1.5 GW in the first half of FY27. Suzlon also reported a net cash position of Rs 2,048 crore and consolidated net worth of Rs 10,277 crore. CRISIL upgraded its long-term credit rating to AA-/Stable.
Suzlon Shares: Buy, Sell Or Hold?
Brokerages flagged margin pressure and cash conversion concerns, despite the company's strong execution in the September quarter.
Nuvama: Hold | Target Price: Rs 41 (Earlier Rs 51)
Nuvama retained its ‘Hold' rating but cut its target price to Rs 41 from Rs 51. While Suzlon's 710 MW deliveries exceeded its estimate of 690 MW, the 14.8% EBITDA margin missed its estimate of 16.6%, resulting in an approximately 10% shortfall in EBITDA and profit.
The brokerage attributed the margin weakness to foreign exchange and commodity headwinds of around 50 basis points and Suzlon 2.0 costs of approximately 100 basis points. It expects normalised margins of 16.5-17%.
Nuvama also flagged weak cash conversion, with higher receivables and inventory contributing to negative operating cash flow of Rs 180 crore. It cut its FY27 and FY28 EPS estimates by 9% and 7%, respectively.
JM Financial: Add (Earlier Buy) | Target Price: Rs 40 (Earlier Rs 46)
JM Financial downgraded Suzlon to ‘Add' from ‘Buy' and reduced its target price to Rs 40 from Rs 46.
The brokerage flagged margin pressure from a higher EPC mix and cautioned that growth and profitability could face challenges from FY28 onwards due to the limited size of India's wind market and increasing industry competition.
JM Financial expects Suzlon's EBITDA margins at 15%, 16% and 15% in FY27, FY28 and FY29, respectively.
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