Suzlon Energy share price locked at 5% lower circuit for second straight day; Should you buy or sell?

Suzlon Energy share price was locked at 5% lower circuit for the second consecutive session on Tuesday after the stock was put on Direct stage IV “ASM framework” with effect from October 9. ASM stands for Additional Surveillance measures.

Suzlon Energy shares opened 4.4% lower at ₹26.46 apiece against the previous close of ₹27.69 apiece on the BSE. However, as selling intensified in the early deals, the stock fell to hit a 5% lower circuit limit of ₹26.31 apiece.

The selling in Suzlon shares comes after the stock was added to the ASM IV framework, a mechanism to control the price movement to protect investors.

Also Read: FIR filed against Hero MotoCorp alleging forgery, Pawan Munjal, top execs named

It is the final stage and the margin requirement rises to 100% for all clients while the price band narrows to 5% for the stock.

Suzlon Energy shares have given multibagger returns to investors. The stock has rallied over 230% in the last six months and over 148% year-to-date (YTD).

Suzlon Energy share price has jumped 243% in the last one year period and more than 791% in three years, giving stellar returns to the investors.

(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!)

In August, brokerage firm JM Financial initiated coverage on Suzlon Energy with a ‘Buy’ rating and a target price of ₹30 per share. This is an upside of 14% from today’s low price.

“Suzlon Energy with leading market share (33%), higher depth of manufacturing (4.5GW), most credible O&M services (35%+ EBITDA) and technology superiority (3MW sets under testing) is best placed to grow its order book and enhance project execution gaining from the industry tailwinds,” JM Financial said.

As the company is on its way to become net-debt free, JM Financial expects Suzlon Energy to deliver revenue and EBITDA CAGR of 31% and 38% respectively over FY23-26E. 

Also Read: Ashish Kacholia buys 6.2 lakh shares of Saakshi Medtech & Panels a week after listing

“With industry tailwinds in place, a deleveraged balance sheet and a robust order book, we expect a strong pick-up in the company’s performance going forward,” it said.

In the quarter ended June 2023, Suzlon Energy reported a sharp decline of 96% in its consolidated net profit to ₹101 crore, compared to ₹2,433.33 crore in the corresponding period last year. 

The renewable company's revenue from operations in Q1FY24 dropped 2% to ₹1,347.52 crore from ₹1,377.58 crore in the year-ago period.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.