SUZLON - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.1
| Stock Code | SUZLON | Market Cap | 67,714 Cr. | Current Price | 49.8 ₹ | High / Low | 74.3 ₹ |
| Stock P/E | 22.4 | Book Value | 5.37 ₹ | Dividend Yield | 0.00 % | ROCE | 36.2 % |
| ROE | 45.6 % | Face Value | 2.00 ₹ | DMA 50 | 50.7 ₹ | DMA 200 | 55.6 ₹ |
| Chg in FII Hold | 1.03 % | Chg in DII Hold | -0.91 % | PAT Qtr | 1,328 Cr. | PAT Prev Qtr | 346 Cr. |
| RSI | 52.9 | MACD | -1.00 | Volume | 6,32,62,621 | Avg Vol 1Wk | 6,90,81,479 |
| Low price | 44.8 ₹ | High price | 74.3 ₹ | PEG Ratio | 0.35 | Debt to equity | 0.01 |
| 52w Index | 16.8 % | Qtr Profit Var | 644 % | EPS | 2.22 ₹ | Industry PE | 40.7 |
📊 Analysis: SUZLON demonstrates strong fundamentals with ROE at 45.6% and ROCE at 36.2%, indicating excellent capital efficiency. The P/E of 22.4 is well below the industry average of 40.7, suggesting undervaluation. PEG ratio of 0.35 highlights attractive growth prospects at a reasonable price. Debt-to-equity ratio of 0.01 shows a virtually debt-free balance sheet, adding financial resilience. However, dividend yield is 0%, limiting passive income. Technical support lies around 45–50 ₹, with resistance near 70–74 ₹. The ideal entry zone is 45–50 ₹ for margin of safety. For existing holders, a long-term horizon of 3–5 years is favorable, with partial profit booking near 70–74 ₹ resistance if valuations stretch.
✅ Positive
- Exceptional ROE (45.6%) and ROCE (36.2%) support strong capital efficiency.
- Low debt-to-equity ratio (0.01) ensures financial stability.
- P/E of 22.4 is attractive compared to industry average (40.7).
- PEG ratio of 0.35 highlights undervaluation relative to growth.
- FII holdings increased by 1.03%, showing foreign investor confidence.
- Quarterly PAT surged to 1,328 Cr. vs 346 Cr., reflecting strong earnings momentum.
⚠️ Limitation
- Dividend yield of 0% offers no passive income.
- EPS of 2.22 ₹ remains modest relative to valuation.
- DII holdings decreased by -0.91%, showing reduced domestic confidence.
- Stock trading at only 16.8% of 52-week index range, reflecting weak momentum.
📉 Company Negative News
- Low book value (5.37 ₹) compared to current price.
- MACD at -1.00 indicates short-term bearish sentiment.
📈 Company Positive News
- Quarterly profit variation (+644%) shows massive earnings recovery.
- Strong institutional interest from foreign investors.
- Debt-free balance sheet enhances resilience and growth potential.
🏭 Industry
- Renewable energy sector has long-term demand drivers: government push, global decarbonization, and rising energy needs.
- Industry P/E at 40.7 suggests SUZLON trades at a discount.
- Structural drivers: wind energy adoption, clean energy transition, and policy support.
🔎 Conclusion
SUZLON earns a rating of 4.1 due to strong ROE/ROCE, undervaluation relative to industry, and debt-free balance sheet. Long-term investors can consider entry in the 45–50 ₹ zone for margin of safety. Current holders should maintain a 3–5 year horizon, with partial profit booking near 70–74 ₹ resistance. The stock remains a strong renewable energy play with high growth potential, though dividend yield and short-term momentum are limitations.