Suzlon Energy shares rise 19% in 3 months. Can the stock rally past Rs 86?

Economic Times

a day ago

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Key levels in focus as stock consolidates
Momentum indicators and volumes reflect fatigue
Earnings and order wins offer support
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Shares of Suzlon Energy have climbed nearly 19% over the past three months, buoyed by steady order wins and improving financials. However, a recent reversal, down 4.7% in the past month and 4% in the last week, has raised questions about whether the stock's momentum is stalling or merely taking a breather.Despite short-term pressure, analysts say the broader technical structure remains intact, with some projecting upside targets as high as Rs 86.50.'The current price action reflects consolidation within a bullish medium-term setup, akin to a saucer or rounded bottom formation, supported near Rs 61-62,' said Drumil Vithlani, Technical Research Analyst at Bonanza.'This phase appears healthy overall, not a breakdown, but a base-building period before a potential leg up.' He added that Rs 68-70 serves as a key hurdle, and sustained closes above this zone could open targets toward Rs 74-80.Amruta Shinde, Technical & Derivative Analyst at Choice Broking, also sees strength in the chart. 'The current price action appears to be a healthy consolidation rather than a bearish setup for the long term,' Shinde noted, highlighting a potential Cup and Handle formation on the weekly chart. She said a decisive breakout above Rs 68.30 could push the stock toward Rs 73.50, possibly extending to Rs 86.50 in the medium term.Shinde added that near-term support levels to watch are Rs 62.09 and Rs 59.80, the latter aligning closely with the 50-week EMA. 'Unless the price breaks below Rs 59.80 with strong volume, the structure remains constructive for long-term investors.'Harshal Dasani, Business Head at INVasset PMS, observed that while Suzlon has lost some ground recently, it still holds its long-term trend. 'After gaining over 17.5% in the past three months, Suzlon Energy has lost steam recently, sliding about 8% in the last 30 days and flattening out year-to-date. Yet, despite the slowdown, the broader technical structure does not indicate a breakdown,' he said.Dasani pointed out that the stock is still trading above its 100-day (Rs 61.7), 150-day (Rs 58.3), and 200-day (Rs 53.1) simple moving averages, indicating that the long-term trend remains intact, even as short-term moving averages (5D to 50D) have turned negative. 'Support lies at Rs 60.5–Rs 58.3, with Rs 53 acting as a strong base if a deeper pullback unfolds. On the upside, Rs 66.5–Rs 67.5 is an immediate hurdle, and any move past Rs 68.5 may reopen the path toward the recent swing high of Rs 71.8–Rs 72.5.'Vithlani also flagged Rs 60 as critical. 'A daily close below Rs 60 could invalidate the constructive bias and steer momentum toward bearish territory,' he said.Technically, the Relative Strength Index (RSI) stands at 48.4, indicating neutral momentum, while the MACD at -0.2 remains below both the center and signal lines.'Volume patterns suggest weakening tailwinds recently, aligning with broader fatigue after a massive multi-year rally,' said Vithlani.Dasani added, 'Suzlon has been trading on below-average volumes, with delivery volumes well under the 20-day average in most recent sessions.' However, he noted, 'There have been no spikes in red candle volumes, which typically mark distribution.' According to him, the Rs 53–Rs 55 zone, which saw over 100 million shares traded during the March–April breakout, continues to act as a long-term support base. 'Unless there's a volume-led breach below Rs 58, the tone stays neutral-to-cautiously positive.'Shinde noted a similar trend. 'Volume during this consolidation phase has been relatively subdued, which is typical in a sideways market. However, any spike in volume near support zones could signal accumulation and a possible reversal. Likewise, a breakout above Rs 68.30 with strong volume confirmation would reinforce bullish sentiment and validate continuation of the uptrend.'Suzlon's Q4FY25 earnings provided fundamental backing to its technical setup. The company reported a net profit of Rs 1,182 crore, up 377% year-on-year, while revenue rose 73% to Rs 2,207 crore. Margins expanded to 20.9%, supported by stronger execution and reduced debt. Net debt now stands at Rs 1,438 crore.'Even with these positives, the stock trades at a P/E of 36–38x, leaving little room for error,' Dasani cautioned. 'The current order book of 5.5 GW, including new platform orders, offers visibility, but the market has priced in much of the turnaround.' He added that while return ratios have improved (ROCE ~22%), 'sustainability of this performance in a rising interest rate environment and execution-heavy sector remains to be seen.'Suzlon continues to add to its order book. In August, it secured a 381 MW wind project from Zelestra spanning Maharashtra, Karnataka, and Rajasthan—one of the largest this year. This followed a 170.1 MW order from AMPIN Energy in June.'India's updated wind energy norms, mandating local sourcing and data localisation, could benefit Suzlon's domestic footprint over time,' Dasani said. 'That said, investors should monitor whether these project wins translate into timely execution and margin stability, especially given volatility in global component costs and logistics.'For now, the stock trades within a Rs 58–Rs 72 band. Unless either side is breached decisively, analysts expect it to continue consolidating, with a tilt toward the upside.Also read | Nifty logs longest weekly losing run since 2020 crash. 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