A plethora of investors have raised eyebrows after noting that the stock price of Suzlon Energy, one of the most renowned companies in India’s wind energy sector, has changed over the last couple of weeks. The Indian stock market was on a rise yet the stock price dropped, leading to discussions regarding the stock’s performance and potential in the coming years. In this article, we discuss the latest developments, try to understand the reasons for such price movements, and analyze the growth prospects of Suzlon Energy in the renewable energy sphere.
Recent Changes in the Market for Suzlon Energy
Operator of wind energy farms and solar projects in India, Suzlon Energy’s share price underwent consistent upper circuits over the last few days, indicating increased investor activity. But this was followed by a fall on the exchanges and eventually streaks the sane with the news of the stock market being in a rally. The stock made a positive start at ₹66.1, only to lose steam at the closing bell to ₹65.6, having recorded an intraday high of ₹68.3. A phenomenon which adds fuel to stock’s further decline, aka profit booking was witnessed quite virulently, with the stock seeing a day’s low of ₹64.6.
The short term pressure has also been instrumental in creating a price band for the stock and multimillion dollar investors institutions, has registered ₹50 to ₹70 on the scales. Extraordinary moves in the short-Term band consolidation price fluctuation helped the intra-day traders grab profits, while its potential is still being comprehended by long-term investors.
Understanding the Reasons for Suzlon’s Share Price Correction
Profit Taken by Big Investors
Drawing the attention of some big fund houses, the recent rallies have been the cause for some concern. But such institutional investors are short-term in nature “fresh money has come into the market and profit booking takes place where there are quick returns’’ This has caused the stock to be on a downward trend.
Sector Revival and Investment Consciousness
Out of the overall rise that the market underwent there was a level of raw inertia which prevented Suzlon shares from completely healing due to some sector specific occurrences and the psyche of the investors.
Price Volatility Over Time
However, there has been a history of sharp swings in sUzlon’s prices. For example, during the economic recession, the stock price, during the economic recession, saw a decline from ₹190 in 2008 to ₹17 in 2020. It on the other hand, seems to have recouped quite strongly earning investors more than 900% in the decade that followed.
Suzlon and Renewable Energy: Prospects Ahead
Suzlon is today India’s largest wind energy producing company having about a quarter of the country’s market and which we expect to move to 40% soon. There are several factors that can contribute to such growth potential.
Government Policies Focused on Renewable Integration
The ‘One Country One Grid Policy’ is India’s attempt to augment performance of the power sector by bringing in additional efficiency in both the distribution and consumption of electricity.
Global Consolidation and Investments
Suzlon is in the right position to make the most out of international partnerships such as Germany’s drive towards ,renewable energy schemes. These international partnerships are formed in order to deal with climate change and encourage investments in green technologies.
Increased Wind Energy Requirements
Suzlon stands to benefit from clean energy initiatives owing to her competence in manufacturing wind turbines as the world looks out for more clean energy sources.
Institutional Insights and Estimates of the Analysts
Apart from enquiring small institutions like Janus Henderson, a number of larger institutions like Jio Financial Services and Morgan Stanley revised their price estimates for Suzlon. Morgan Stanley upgraded its view on the company, which last week lifted its target price to 71 kyti saying it was mostly bullish on the stock. Jio Financial Services also set an intra-day price target of ₹68 which was reached at least before profit booking set in.
This certainly highlights the likelihood of recovery and growth of the stock as they have low price earnings multiples across their peer firms and are suitable investment options for the long term.
Renewable Energy Developments and Global Summit of Germany
One of the significant news came from Germany where the News 9 Global Summit held very few years back advanced renewal energy as one of the key elements that the world should progress towards Ina unison. Other notable speakers include India’s Modi and other sector-related heads who called for urgent actions to be taken up in the quest for renewable sources of energy.
Some of the clear take homes from the summit included:
India’s Supremacy in Renewable Energy
It is emerging that India has the capacity to take charge of the world’s renewable energy supply chain, specifically in wind and solar energy.
Green Hydrogen Initiatives
India has and Germany has entered into an arrangement to move up in green hydrogen technology that will also benefit companies such as Suzlon.
Job Opportunities
A sizable number of employment prospects are likely to be created within the renewable energy sector dovetailing with the Japanese economy as well as the environmental objectives.
- Investment Opportunities in Suzlon Energy
The prospects for growth for Suzlon in future are favorable due to
Continuous Growth in Market Share
Growth in market share of Suzlon has placed the company on a sustained growth path.
Focus on R&D
The company’s technologies improvement in the wind turbine systems makes the firm able to compete internationally.
Supportive Government Policies
The favourable policies on clean energy are healthy for the growth of Suzlon.
Conclusion: Should I buy shares of Suzlon Energy?
Recently, the stock performance of Suzlon Energy put the shares in focus and raises questions regarding the potential for short-term trading as well as a buy-and-hold strategy. High volatility in the market including profit booking has affected stock prices but the strategic focus of the company in the sector of renewable energy sources and growth-oriented initiatives leaves a bright future for the company.
It is recommended that investors do their own research or talk to financial advice before making an investment. With a focus on eco-friendly energy and without losing its market position, Suzlon Energy remains a force in the renewable energy sector in India.