Suzlon shares dip 30% from 52-week high: 3 reasons why investors shouldn’t worry

Shares of Suzlon Energy gained over 5% on Tuesday to hit the upper circuit, closing at Rs 62.22. Despite this uptick, the stock is still nearly 30% below its 52-week high of Rs 86.04. However, there are several reasons why investors should not be concerned about this dip.
Suzlon’s financial results for the second quarter of FY25 indicate good growth. The company reported a 48% year-on-year (YoY) increase in consolidated revenues, driven by the delivery of 256 MW of wind turbine generators (WTGs), marking a 94% YoY growth. This was the highest delivery volume for the second quarter in seven years, achieved despite challenging weather conditions.
Key highlights from Suzlon’s Q2 FY25 financial performance include:
Suzlon’s balance sheet also remains healthy, with net cash of Rs 1,277 crore following the consolidation of Renom Energy, the company’s service business arm.
Experts believe Suzlon’s current dip offers a buying opportunity. A report from Geojit Financial Services Ltd values the stock at Rs 68, citing several factors:
Suzlon’s management is optimistic about its future. The company’s CEO, JP Chalasani, highlighted the high demand in the commercial and industrial (C&I), which accounts for 54% of Suzlon’s current order book of 5.1 GW.
“ According to an ICRA report, India will require about 78 gigawatt (Gw) of wind and solar energy by 2027, which represents huge potential. We are the preferred players in this space. Maintaining our lead over competitors will not be a challenge. This is why we have the highest-ever order book of 5.1 Gw, and we expect this to continue for at least the next few quarters,” said Chalasani in an interview with Business Standard.
Suzlon has achieved a huge milestone by becoming a debt-free company, with Rs 1,200 crore in cash on its balance sheet. The company is now focusing on capacity expansion and diversification.
“We currently have Rs 1,200 crore sitting on our balance sheet. We are focusing on capacity expansion and do not need to borrow any more money. Our service business generates Rs 750 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA) every year. Therefore, there is enough cash flow, and we have no plans to borrow at this stage,” said Chalasani.
The company is also diversifying beyond wind energy. It plans to venture into manufacturing castings and forgings for sectors like defence, railways, and oil and gas. While these sectors require long qualification processes, Suzlon expects to start receiving orders by the end of next year.
“The non-wind segment primarily involves manufacturing castings and forgings for sectors like railways, defence, and oil and gas. Qualifying for these sectors takes time, especially in defence and railways. The qualification process is lengthy, but we are in the process of meeting these requirements. We expect to start receiving orders by the end of next year,” he told Business Standard.
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