Why is Suzlon Energy falling/rising?

Market Performance and Sector Context

Suzlon Energy’s recent price movement is part of a downward trend, with the stock falling 4.29% over the past week, contrasting with the Sensex’s modest 0.79% gain during the same period. Year-to-date, the stock remains down by 11.44%, while the Sensex has advanced by 9.08%. Over the last year, Suzlon has underperformed significantly, posting a negative return of 15.81% compared to the Sensex’s 10.47% rise. This underperformance is notable given the company’s impressive long-term growth, with a three-year return exceeding 585%, far outpacing the benchmark’s 39.39%.

On the day in question, Suzlon underperformed its sector by 0.73%, with the renewable energy sector itself declining by 2.06%. The stock touched an intraday low of ₹55.01, down 2.96%, and traded below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling bearish momentum. Despite this, investor participation showed signs of strength, with delivery volume rising by 3.68% against the five-day average, indicating sustained interest among shareholders.

Strong Operational Metrics Amidst Price Pressure

Fundamentally, Suzlon Energy has demonstrated robust growth. The company’s net sales have expanded at an annual rate of 39.83%, while operating profit has grown by 37.85%. The latest quarterly results, declared in September 2025, were very positive, with net sales reaching a record ₹3,870.78 crore, PBDIT at ₹720.84 crore, and PBT less other income at ₹535.95 crore. Net profit surged by an impressive 294.5%, marking the fourth consecutive quarter of positive results. These figures underscore the company’s operational strength and its ability to scale profitably in the renewable energy space.

Additionally, Suzlon maintains a low average debt-to-equity ratio of zero, reflecting a conservative capital structure that reduces financial risk. Institutional investors hold a significant 32.86% stake, suggesting confidence from sophisticated market participants who typically conduct thorough fundamental analysis.

Valuation and Market Sentiment Challenges

Despite these positives, the stock’s valuation appears stretched. Suzlon’s return on equity stands at a high 40.4%, yet it trades at a price-to-book value of 9.5, indicating a very expensive valuation relative to its book value. While this valuation is discounted compared to peers’ historical averages, it remains a concern for investors seeking value. The company’s price-to-earnings growth (PEG) ratio is notably low at 0.1, reflecting rapid profit growth but also signalling that the market may be cautious about sustaining such momentum.

The stock’s underperformance relative to the broader market and its sector suggests that investors may be factoring in risks related to valuation and sector volatility. While Suzlon’s profits have risen by 221.6% over the past year, the share price has declined by 15.81%, highlighting a disconnect that could be attributed to market sentiment or concerns about future growth sustainability.

Conclusion: Navigating a Complex Investment Landscape

Suzlon Energy’s recent price decline on 21-Nov reflects a combination of sector-wide weakness in renewable energy and valuation concerns despite the company’s strong operational performance and impressive profit growth. The stock’s trading below key moving averages and its underperformance relative to the Sensex and sector peers indicate cautious investor sentiment. While the company’s fundamentals remain solid, with consistent quarterly gains and a healthy balance sheet, the expensive valuation and market dynamics have weighed on the share price.

Investors considering Suzlon should weigh the company’s robust growth metrics against the current market environment and valuation levels. The stock’s liquidity and rising investor participation suggest ongoing interest, but the recent price action underscores the importance of careful analysis in a sector subject to volatility and shifting investor preferences.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →