Buy or sell Suzlon? Analysts have their say on the key levels

Suzlon Energy shares have declined as much as 9% from its record high level of ₹52.10 the stock hit on June 4, 2024. The stock hit the 5% lower circuit in early deals today after one of the company's independent directors, Marc Desaedeleer resigned with effect from June 8, citing corporate governance issues at the Pune-based firm.

Following this, the Suzlon Energy management held an analyst call, where they insisted that the resignation was not due to any financial or operational discrepancies and promised to work on the areas of concern.



Given the "emphatic assurance" of maintaining good corporate governance from the management during the post-resignation conference call complimented by the favourable macros, healthy financials, improving the pace of execution and a healthy Board composition, JM Financial analysts continue to maintain their 'Buy' rating with a target price of ₹54 per share.

Another brokerage Nuvama Institutional Equities said it finds no reason to stray away from their 'Buy' call on Suzlon with a target price of ₹53 per share. Their recommendation was backed by the wind sector's structural upturn and financial turnaround of the company.

The brokerage wrote in its note that the issues raised by the company's independent director were soft in nature and process-oriented.

Nuvama added that the management of Suzlon is looking to address the needs of the business first and intends to implement such "best-in-class" suggestions in due course of time.

Global brokerage firm Morgan Stanley has recently issued an 'Overweight' call on the Suzlon Energy stock, calling it a key beneficiary of India's energy transition, well positioned to benefit from the move to greener, cleaner energy.

Key Levels To Track?

Prashanth Tapse of Mehta Equities told CNBC-TV18 that this news would create short-term pain but in the long term, Suzlon is turning out its financial position and the operational business with its net debt-free status and has secured a working capital tie-up with REC.

Technically, the stock has an immediate support zone of ₹42.90-43.85 and is trading well above this range. Any pullback towards the ₹44-45 levels should offer a good buying opportunity, with a stop loss set slightly below the ₹35 mark for short-term targets of ₹65 and 75, Tapse said.

The RSI (14) on daily charts, being near ₹56, also indicates potential momentum pick-up and suggests that the stock is a good buy on declines.

"Although the momentum indicators are slowing down in the very near term, on the technical front, a strong bullish candle above 51 will start the next leg of the rally in this stock. The turnaround story in this counter should only be considered complete with a close below the 37 levels," said Rahul Ghose, CEO of Hedged.in.

According to technical analyst Rohan Shah of Religare Broking, Suzlon has recorded a strong vertical rally after registering a decisive breakout from the multi-month consolidation pattern. Post the breakout, the price rallied from 12 to all the way towards 50 levels in the matter of just eight months.

However, after that, the price witnessed a price and time-wise correction, trading in a wide range, i.e., 50 on the higher side and 38 on the lower side.

Thus Shah believes, that for the price to trigger the next leg of up move; it would be crucial for the stock to register a breakout above 50 levels on the closing basis. In the event of a breakout above the 50 mark, it would open the way for 60 zones. On the other hand, key support is seen at 42 and 38 levels.

Suzlon's share price has rallied more than 200% in the last year, against a 22% gain in the benchmark BSE Sensex. This was the best annual performance of the Pune-based company since its 2005 listing.

With today's decline, Suzlon Energy's market capitalisation has slipped to ₹65,094 crore on the BSE.

Shares of Suzlon Energy are trading 4.13% lower at ₹47.84. The stock had made a recent high of ₹52.10, having risen 20% in the last month.