Is It the Right Time to Invest in Suzlon? Analysis and Insights

Suzlon Energy, a leading manufacturer of wind power generators, has recently shown some positive signs on the stock market. However, before making any investment decisions, it is crucial to carefully analyze the company's financials and market trends.

Current Market Trends and Recommendations

Equity Traders have noted that Suzlon is currently showing a positive trend. If you already hold shares, it is recommended to hold them for bigger targets. For new investors, the entry point is expected to be around 14-15 rupees, though Energy stocks are in focus right now. The recent focus on energy companies such as Tata Power and Adani Power is driving these sectors' valuations up, so it's a good time to revisit.

Technical Analysis and Resistance Levels

The technical chart indicates that if Suzlon can sustain above 13 rupees, it could potentially reach targets of 18, 22, and 26 rupees. However, the current share price of 8 rupees is near the resistance level. The first resistance is around 8.50, and the next resistance is around 12 rupees. Therefore, it is recommended that existing holders take profits if the stock reaches these levels. Fresh buyers should be cautious, and it is suggested not to enter the stock as a new buyer given its current challenges.

Company Background and Fundamentals

Suzlon Energy is a company engaged in manufacturing wind power generators for electricity generation.

A leader in their field, their products are used in various climates including hot, dry deserts, humid coasts, and near-freezing plains. Financially, Suzlon Energy has had a mixed performance. While they started showing a path to profits in 2021, the net profit has been on a downward trend, increasing by nearly double over the last year (from -Rs. 1527 crore to -Rs. 2642 crore). Foreign investors' stakes have increased recently, which may signal positive investment inclination. Lower interest rates and loan restructuring have helped the company pay reduced interest, contributing to higher profits. On a negative note, the company is struggling with weak fundamentals. Promoter shareholding has decreased, and a significant portion of shares are pledged, indicating a cash crunch position. While the company has generated cash flow from operations, it is primarily used to pay off current debt, and the company is working to diminish borrowings.

Based on the provided analysis, the advice is to avoid investing in Suzlon Energy. However, if you still feel an inclination to purchase, consider buying 2000 shares at around Rs. 10000 and potentially profiting from a temporary rise due to fictitious demand.

Alternative Investment Opportunities

As a professional investor, I would recommend looking for companies with strong management and a bright future. For example, ITC, a company with good results in the current financial year 2019-20, is a strong contender. Similarly, Exide Industries, known for its lithium batteries, and Coal India, a leader in the coal sector, are also promising prospects.

Lastly, keep in mind that all advised equity shares are trading well below their fair value or intrinsic value, guaranteeing potential returns of between 50% to 100% within a one-year time horizon.

Stay Informed for Better Decisions

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Thank you for your attention, and I wish you all the success in your investment endeavors!