Suzlon Energy Receives 'Hold' Rating After Strong Q1 Results and Bullish Technical Trend

Suzlon Energy, a largecap company in the renewable energy industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared very positive results for the quarter ending June 2024, with a growth in net profit of 18.96%. In fact, the company has consistently declared positive results for the last 14 quarters, with its PBDIT(Q) and OPERATING PROFIT TO NET SALES(Q) reaching their highest levels at Rs 370.08 cr and 18.31%, respectively.
Technically, the stock is currently in a bullish range and has shown a 3.75% return since September 12, 2024. This improvement in the technical trend is supported by factors such as MACD, Bollinger Band, and KST. Additionally, the stock has a high institutional holding of 30.7%, indicating that these investors have better resources to analyze the company's fundamentals.

Suzlon Energy has also shown consistent 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 1,12,460 cr, it is the largest company in the renewable energy sector, constituting 46.77% of the entire sector. Its annual sales of Rs 7,199.70 cr make up 45.53% of the industry.

However, the company does have some weak long-term fundamental strengths, with an average return on equity (ROE) of 6.82%. Its net sales have only grown at an annual rate of 9.53% over the last 5 years, indicating poor long-term growth. Additionally, the company has a high debt to EBITDA ratio of 5.27 times, showing a low ability to service debt.

In terms of valuation, Suzlon Energy has a very expensive ROE of 18.2 and a price to book value of 29.2. However, the stock is currently trading at a discount compared to its average historical valuations. While the stock has generated a return of 248.27% in the past year, its profits have only risen by 256.2%, resulting in a PEG ratio of 0.6. Overall, with its recent 'Hold' rating and strong financial performance, Suzlon Energy remains a promising player in the renewable energy industry.