This is not a buy or sell recommendation only for educational purposes and I am not a SEBI registered.
Entry: Above 61.2 on monthly breakout.
Target : 61.5-65.45-70.20-72.25-82.35-86.4
If closed above 87 on monthly candle can touch 90-100
Stoploss : 58
Suzlon Energy Limited, a prominent player in India's renewable energy sector, has demonstrated significant operational progress in recent quarters. However, certain financial metrics and market dynamics warrant a cautious approach.
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📊 Financial Performance Overview
Revenue and Profitability:
In Q3 FY25, Suzlon reported a revenue of ₹2,969 crore, marking a 91% increase year-over-year. EBITDA more than doubled to ₹500 crore, with an EBITDA margin of 16.8%.
Despite this quarterly growth, the FY24 annual report indicates a 77.1% decline in net profit year-over-year, with net profit margins decreasing from 48.4% in FY23 to 10.1% in FY24.
Balance Sheet and Debt Position:
Suzlon has made strides in deleveraging, with total liabilities decreasing by 26.34% to ₹32.59 billion in 2024. Cash and short-term investments increased by 18.48% to ₹4.35 billion.
The debt-to-equity ratio stands at a conservative 0.06, indicating a strong balance sheet position.
Return Metrics:
Return on Capital Employed (ROCE) is reported at 24%, surpassing the industry average of 18%.
Return on Equity (ROE) is projected to improve to 28.6% by FY27.
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📈 Operational Highlights
Order Book and Capacity Expansion:
As of May 2024, Suzlon's order book expanded to 3.3 GW, a significant increase from 652 MW in FY23.
Notable contracts include a 402 MW project with Juniper Green Energy and a 551.25 MW project for the Aditya Birla Group.
Technological Advancements:
The S144 wind turbine, with a hub height of 160 meters, is India's tallest and delivers 40-43% higher generation than previous models.
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⚠️ Risks and Considerations
Valuation Concerns:
The stock's P/E ratio stands at 64.94, which is higher than industry peers like Vestas (25.3) and Siemens Gamesa (18.7), suggesting potential overvaluation.
Market Volatility:
The stock experienced a 40% decline from its 52-week high, attributed to market-wide corrections and profit-booking after a substantial rally.
Corporate Governance:
The resignation of a key managerial person and warnings from NSE and BSE over regulatory non-compliance have raised concerns about corporate governance.
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🔍 Insider Activity and Market Sentiment
There is no publicly available information confirming insider trading or undisclosed material events related to Suzlon Energy. However, the company's recent performance and strategic initiatives have garnered positive attention from investors and analysts.
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📌 Conclusion
Suzlon Energy exhibits strong operational momentum, a robust order book, and technological innovation in the renewable energy sector. While financial metrics show improvement, valuation concerns and corporate governance issues necessitate a cautious investment approach. Investors should monitor the company's execution of its order book, adherence to regulatory norms, and market dynamics closely.
