Current Rating and Its Significance
The 'Sell' rating assigned to Suzlon Energy Ltd indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing exposure or avoiding new purchases at this time. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s potential risk and reward profile.
Quality Assessment
As of 11 February 2026, Suzlon Energy Ltd holds an average quality grade. This reflects a stable operational foundation but also highlights areas where the company may not be excelling compared to industry peers. The return on equity (ROE) stands at a robust 40.4%, signalling efficient use of shareholder capital and strong profitability. However, the average quality grade suggests that other qualitative factors such as management effectiveness, competitive positioning, or operational consistency may be moderate rather than exceptional.
Valuation Considerations
The valuation grade for Suzlon Energy Ltd is classified as very expensive. Currently, the stock trades at a price-to-book (P/B) ratio of 8.3, which is significantly higher than typical benchmarks for the heavy electrical equipment sector. This elevated valuation implies that the market has priced in substantial growth expectations. Despite this, the stock is trading at a discount relative to its peers’ historical valuations, indicating some relative value within the sector. Investors should be mindful that such a high P/B ratio can increase downside risk if growth expectations are not met.
Financial Trend and Performance
The financial grade is positive, reflecting encouraging trends in Suzlon Energy Ltd’s profitability and earnings growth. The latest data shows that profits have surged by 176% over the past year, a remarkable improvement that underscores the company’s operational turnaround. The price-to-earnings-to-growth (PEG) ratio is an attractive 0.1, suggesting that the stock’s price growth is not fully justified by earnings growth, which could be a positive sign for value-oriented investors. However, despite these strong fundamentals, the stock has underperformed the broader market, delivering a negative return of -9.52% over the last year compared to the BSE500’s 12.78% gain.
Technical Outlook
The technical grade is bearish, indicating that the stock’s price momentum and chart patterns are currently unfavourable. Recent price movements show a decline of 1.38% on the day, with a one-week loss of 5.46% and a three-month drop of 18.65%. This downward trend suggests that market sentiment is weak, and short-term technical indicators do not support a near-term rally. Investors relying on technical analysis may view this as a signal to exercise caution or await a more favourable setup before considering entry.
Stock Returns and Market Comparison
As of 11 February 2026, Suzlon Energy Ltd’s stock returns have been disappointing relative to the broader market. The stock has declined by 9.48% over the past year, contrasting sharply with the BSE500 index’s positive return of 12.78%. Year-to-date, the stock is down 10.79%, reflecting ongoing challenges in regaining investor confidence. The six-month and three-month returns of -25.70% and -18.65% respectively further highlight the recent weakness in the stock price.
Implications for Investors
The 'Sell' rating signals that Suzlon Energy Ltd currently faces headwinds that may limit upside potential in the near term. While the company’s financial trend is encouraging, with strong profit growth and an attractive PEG ratio, the very expensive valuation and bearish technical outlook suggest caution. Investors should weigh the risks associated with the stock’s high price multiples and recent underperformance against the positive earnings momentum. For those holding the stock, this rating may prompt a review of portfolio allocation, while prospective investors might consider waiting for more favourable valuation or technical conditions.
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Sector and Market Context
Suzlon Energy Ltd operates within the heavy electrical equipment sector, a space characterised by capital-intensive operations and cyclical demand patterns. The midcap company faces competition from both domestic and international players, which influences its pricing power and market share. The sector’s performance is often linked to broader industrial activity and infrastructure development trends. Given the stock’s recent underperformance relative to the BSE500, investors should consider sector dynamics alongside company-specific factors when evaluating Suzlon Energy Ltd.
Summary of Key Metrics
To summarise, as of 11 February 2026, Suzlon Energy Ltd exhibits the following key metrics:
- Mojo Score: 36.0 (Sell grade)
- Return on Equity (ROE): 40.4%
- Price to Book Value (P/B): 8.3 (very expensive)
- PEG Ratio: 0.1 (indicating undervaluation relative to growth)
- Stock Returns: -9.48% over 1 year, -10.79% year-to-date
- Technical Grade: Bearish
These figures provide a comprehensive snapshot of the stock’s current standing and underpin the 'Sell' rating assigned by MarketsMOJO.
Investor Takeaway
Investors should interpret the 'Sell' rating as a signal to approach Suzlon Energy Ltd with caution. While the company’s improving financial trend is a positive development, the high valuation and negative technical signals suggest limited upside and potential downside risk. A prudent strategy may involve monitoring the stock for signs of valuation correction or technical improvement before considering new investments. Existing shareholders might evaluate their risk tolerance and portfolio objectives in light of the current outlook.
Conclusion
In conclusion, Suzlon Energy Ltd’s 'Sell' rating reflects a balanced assessment of its current fundamentals, valuation, financial trajectory, and technical position as of 11 February 2026. The rating provides investors with a clear indication of the stock’s risk profile and helps guide informed decision-making in a dynamic market environment.
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