Suzlon Stock September Gains: Is A Reversal Looming?

Suzlon Energy stock price has shown a significant uptrend in September after trading downwards since the beginning of June. The stock started the month at ₹57.86 on September 1 and rose steadily, hitting ₹60.50 by September 22, which is equivalent to about a 4.5% increase. Notably, Suzlon stock price been on a general downtrend year-to-date, and is down by about 3.3% since January.

Furthermore, the trajectory contrasts with a year ago, having fallen nearly 26% 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. Everyone is wondering if this rally will last or if a reversal is in the works.

Unpacking the September Uptrend

Suzlon stock price’s current uptrend is based on a number of positive developments that have happened. The company’s ability to get new orders has been a big reason for its success. The orders show that the company is becoming more competitive and can take advantage of 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 instead of a complete upturn. The stock has 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 not in an overbought zone right now. This could mean that it can still go up, but the speed could slow down. The stock’s 4-hour Relative Strength Index (RSI) is over 65, which means it is gaining ground. The stock is also trading above its 5-, 10-, and 20-day simple moving averages (SMAs), but below its 50- and 200-day SMAs.

Suzlon share price is currently reversing after a steep decline in August, followed by a bullush double-bottom pattern. Source: TradongView

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 in September shows that the company is improving, thanks to a robust order pipeline and a much better balance sheet. But investors should be careful and do their due diligence. 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.

This article was originally published on InvestingCube.com. Republishing without permission is prohibited.