- Suzlon stock price is down by more than 3% YTD but has been sending signals of a potential recovery in September. We discuss its potential.
Suzlon Energy stock price has drifted downwards significantly in the last four trading sessions, cooling off from its recent highs. The stock is on a four-day losing streak, reversing a significant portion of the gains registered earlier in September. The stock started the week at ₹60.95 on September 22 but has declined sharply, hitting ₹56.64 as of this writing, which is equivalent to a loss of about a 7.1%. Notably, Suzlon stock price been on a general downtrend year-to-date, and is down by about 9.5% since January.
Furthermore, the trajectory contrasts with a year ago, having fallen nearly 34% from its highs of around ₹86 in September 2024. Investors are now again paying attention to the wind energy powerhouse, which has had an incredible financial turnaround in the last several years. As I indicated here earlier, there have been signs of a decline, and the question now is whether the stock could find its footing and build traction for the upside.
Unpacking September’s Mixed Signals
Suzlon stock price’s uptrend earlier in September was based on a number of positive developments around its fundamentals. The company’s ability to get new orders has been a big reason for its success. The orders demonstrate that the company is becoming more competitive and is leveraging India’s ambitious clean energy goals. The order book shows that there is a strong demand for Suzlon’s advanced wind turbine generators and its ability to handle all aspects of a project.
An important factor that accelerated this rise was the announcement by Suzlon (NSE: SUZLON) of its biggest contract for FY26, an 838 MW wind power project from Tata Power Renewable Energy Ltd. (TPREL), valued at around ₹5,900 crore. The third repeat purchase from TPREL solidifies Suzlon’s status as the leading wind energy provider in India, with a capacity of over 21 GW.
Is a Reversal in the Works?
It is not easy to say a reversal is in the works at this point in time, but there are a number of indications that Suzlon stock price might be going through a consolidation period before a complete upturn. The stock had been doing really well, and it’s normal and healthy for investors to take profits during a rally.
Technical indicators reveal that the stock is on a bearish momentum currently. The stock’s daily Relative Strength Index (RSI) is at 38, which underlines control by the sellers. The steep decline came after meeting resistance at the psychological $60 mark earlier in the week. The stock is also below the Volume Weighted Moving Average (VWMA) level which is at $58.24 as of this writing. A recovery would need it to return above the VWMA level.
Suzlon share price is on a steep decline on the daily chart. Chart Source: TradingView
What are the Risks?
The September rally looks strong, but there are some weaknesses. However, there are many risks for investors. Some problems that are distinctive to the sector are that demand for wind energy could drop if policies change or if solar energy becomes more popular. Suzlon will need Government subsidies, which are very important for renewable energy, could change since the government needs to maintain its income growing.
Also, outside risks like changes in export market rules or global events that interrupt the supply chain could make it harder to carry out big orders. There are still operational risks. The order book is strong, but the company could face challenges starting and finishing projects on schedule, which can hurt its profits and revenue.
In Conclusion
In conclusion, the recent rise in Suzlon Energy’s stock price earlier in September shows that the company is improving, thanks to a robust order pipeline and a much better balance sheet. However, this week’s decline shows that investors should be careful and do their due diligence before taking new positions. That primarily involves paying close attention to the company’s quarterly results, its ability to carry out projects, and the overall mood of the market.
The gains are primarily down to a strong order book. A massive 838 MW order from Tata Power worth ₹5,900 crore fueled the rally, boosting shares by about 4.5%.
4-hour RSI above 65, trading above short-term SMAs and a the MACD indicator all favour the upside.
A sharp reversal may not be imminent, but a period of consolidation or a temporary pullback is a possibility due to its rapid uptrend and profit booking.
This article was originally published on InvestingCube.com. Republishing without permission is prohibited.