Profit Booking Hits Suzlon Energy Shares Despite Q4 Net Profit Growth

Shares of Suzlon Energy Ltd fell for the second consecutive session on Tuesday, declining another 5% to hit an intraday low of ₹47.86 on the NSE. The selling pressure follows the company’s March quarter results announced last week, which triggered profit booking after a sharp rally in recent months.

Suzlon's stock has seen a robust run-up over the past year, driven by strong order inflows, improved financials, and positive sentiment around India’s renewable energy sector. As of 12:10 PM, the shares were trading at ₹68.52, with a decline of 3.75%.

Profit Booking Continues Post Q4 Print

Investors appear to be locking in gains following the company’s Q4 FY24 earnings, despite Suzlon reporting a net profit of ₹254 crore, up 10.4% year-on-year. Revenue from operations rose 28.5% to ₹2,207 crore during the quarter. However, margin pressures and conservative commentary around execution timelines may have tempered investor enthusiasm.

The recent correction comes amid heightened trading volumes, suggesting institutional activity. Over the past five sessions, Suzlon shares have declined by nearly 10%, eroding part of the stock’s year-to-date gains, which stood at over 80% before the results.

Valuation Reset After Steep Rally

Analysts indicate that the stock may be undergoing a valuation reset, as prices had surged significantly ahead of earnings on optimism around the company’s turnaround strategy. Suzlon has been reducing debt, strengthening its order book, and capitalising on favourable policy support for wind energy projects.

Despite the current weakness, the stock remains significantly above its 52-week low of ₹14.35, reflecting investor belief in the long-term growth potential of India’s wind energy sector. The company’s total order book stood at over 3 GW as of March-end, providing revenue visibility for the next several quarters.

Wind Sector Tailwinds Intact

India’s wind energy segment is expected to gain traction with the government’s increasing focus on energy transition and meeting the 500 GW non-fossil fuel target by 2030. Policy support, including renewable purchase obligations (RPOs) and centralised bidding mechanisms, is likely to drive new project awards.

Suzlon, as one of the country’s leading wind turbine manufacturers, is poised to benefit from these developments. The company has also restarted manufacturing activities at multiple facilities, indicating operational momentum. Execution efficiency and cost controls, however, will remain key metrics to track in the upcoming quarters.

Outlook

While the recent correction reflects typical post-results adjustments and profit booking, analysts are expected to revisit earnings projections and valuation models based on the company’s execution trajectory.

Short-term volatility notwithstanding, the medium-term outlook hinges on timely project deliveries, new order wins, and further balance sheet strengthening.

Suzlon’s performance in the coming quarters will be crucial in sustaining investor confidence, particularly as the renewable energy sector continues to evolve amid shifting cost structures and technology benchmarks.

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