Suzlon Energy share price declined by 1.7 percent and the stock closed the session at Rs 54.23. Suzlon Energy managed to recover from Rs 50 levels seen a few days ago and was comfortably looking to cross Rs 60 but the bearish sentiment in Indian markets has once again taken Suzlon below Rs 55. The stock touched low of Rs 53.45 in today's trade. Investec has suggested BUY Call for Suzlon Energy with target price at Rs 70. Medium to long term investors can Buy Suzlon Energy at current levels as per Investec Research team.

Investec Initiates Coverage on Suzlon Energy with a ‘Buy’ Call and Rs 70 Target Price

Brokerage firm Investec has initiated coverage on Suzlon Energy, issuing a ‘buy’ call with a target price of Rs 70, reflecting a substantial upside from the current levels of Rs 52. According to Investec analysts, Suzlon is well-positioned to capitalize on the revival of the wind energy sector, given the company’s transformation into a net-cash entity, robust return ratios, and a growing order book of 5.5 GW.

Technical Analysis

1. Candlestick Patterns

A review of Suzlon's daily candlestick charts reveals the following:

Recent Pattern: The emergence of a Doji pattern suggests market indecision, indicating a potential trend reversal or continuation depending on subsequent sessions.
Previous Trends: Prior Bullish Engulfing patterns have led to short-term upward movements, while Bearish Harami patterns signaled potential downturns.

2. Fibonacci Retracement Levels

Applying Fibonacci retracement from the 52-week low of ₹35.50 to the high of ₹86.04 yields key levels:

23.6% Retracement: ₹73.14
38.2% Retracement: ₹64.92
50% Retracement: ₹60.77
61.8% Retracement: ₹56.62
76.4% Retracement: ₹48.40
The stock is currently trading around the 61.8% retracement level, a critical point that often acts as support or resistance.

3. Support and Resistance Levels

Identifying pivotal price points:

Immediate Support: ₹50.00 – A breach below this could signal further declines.
Immediate Resistance: ₹58.17 – Surpassing this may pave the way for upward momentum.

Positive Growth Levers Driving Suzlon Energy’s Outlook

Investec highlights several key factors underpinning its optimistic outlook for Suzlon Energy:

Net-Cash Position: The company’s transition to a net-cash entity significantly strengthens its balance sheet and reduces financial risk.
Robust Return Ratios: Suzlon’s return on equity (RoE) is expected to improve from 28.5% in FY24 to 32% by FY27, indicating strong profitability.
Growing Order Book: The company boasts an order book of 5.5 GW, reflecting healthy demand and revenue visibility in the coming years.
Optimized Supply Chain: Suzlon’s well-optimized supply chain enhances operational efficiency, ensuring timely delivery of projects.
Strong Bid Pipeline: The company’s robust pipeline of bids positions it well to capture future growth opportunities in the wind energy sector.

Impressive Revenue and Profit Growth Forecasts

Investec forecasts Suzlon’s revenue and profit after tax (PAT) to grow at a compound annual growth rate (CAGR) of 55% and 66%, respectively, over FY24-FY27.

This rapid growth is driven by increased demand for wind energy, favorable government policies, and Suzlon’s competitive advantages in the sector.
The company’s focus on cost optimization and strategic project execution is expected to drive profitability and shareholder value over the long term.

Actionable Insights

Bullish Scenario: If the stock maintains above the ₹50.00 support and breaks through the ₹58.17 resistance, it could target the ₹64.92 Fibonacci level, aligning with analyst target prices.
Bearish Scenario: A decline below ₹50.00 may lead to further downside, with the next support around ₹48.40.
Investors should monitor trading volumes and broader market conditions, as these factors can influence price movements.