Suzlon Energy Downgraded to 'Sell' by MarketsMOJO, Despite Positive Financial Performance

Suzlon Energy, a largecap company in the renewable energy industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 11, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 6.82%, poor long-term growth with an annual Net Sales growth rate of 9.53% over the last 5 years, and a high Debt to EBITDA ratio of 5.27 times, indicating a low ability to service debt.
In addition, the stock is currently trading at a premium compared to its historical valuations, with a Price to Book Value of 28.3 and a PEG ratio of 0.5. However, the company has declared positive results for the last 14 consecutive quarters, with a growth in Net Profit of 18.96% in June 2024. Its PBDIT(Q) is also at a high of Rs 370.08 crore, and its OPERATING PROFIT TO NET SALES(Q) is at 18.31%, indicating strong financial performance.

Technically, the stock is in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, and KST being Bullish. Additionally, Suzlon Energy has a high institutional holding of 30.7%, indicating that these investors have better capability and resources to analyze the company's fundamentals. Their stake in the company has also increased by 4.83% over the previous quarter.

Despite the recent downgrade, Suzlon Energy has consistently generated positive returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. With a market cap of Rs 1,05,600 crore, it is the largest company in the renewable energy sector, constituting 45.12% of the entire industry's annual sales of Rs 7,199.70 crore.