Home > Market View > Buy or Sell -Suzlon Energy

Buy or Sell -Suzlon Energy

Sunday, August 2, 2009 Leave a comment Go to comments

Suzlon was once the darling of the bull market but had come crashing down in 2008.The company posted quarterly results yesterday and had a net loss.

The problem with Suzlon is the high debt it used to fuel its growth. That went well till the cost of debt was low and the global growth in Wind energy was good. As soon as the growth slowed and the cost of debt became to rise, it was double trouble for Suzlon. That’s what happens when companies aim for exponential growth path based on cheap debt.

My sense is that it will take for the company to get out of this mess. As most of its business is global, the global growth needs to return to 2006-2007 levels before the company can sell its pretty wind farms. Also company needs to do a lot of work on its receivables as they have really ballooned.Working capital managment has become a real challenge for the company.

Coming to the stock price, the stock is a sell on rallies kind of stock. The stock can pick some momentum only after it crosses 125 levels. On the downside, 80 is the critical level to watch, below which, the stock can fall very badly. The stock can be a good short sell candidate after that.

This is a big lesson for investors- Not everything that goes down comes up. Use this rally to get out of bad apples in your portfolio.

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  1. mani
    Sunday, December 27, 2009 at 7:43 am

    hi
    i have 500 share at 85 can i hold that or i sell that (suzlon)

    • Sunday, December 27, 2009 at 3:40 pm

      I’d suggest that you hold keeping a stop around 78-79. The stock can reach around 100 in next few weeks. So a good trade.

  2. S.V.RAMARAO
    Wednesday, October 7, 2009 at 11:24 am

    Sir,

    I have SUZLON 620 shares at Rs.96.99. Can I hold it or average it or book loss? Please advise me

    • Wednesday, October 7, 2009 at 11:38 am

      Book loss and move on to something else. You can always consider Suzlon at a later stage.

  3. sidharth
    Sunday, September 6, 2009 at 10:27 pm

    Hi,
    Thanks for ur advice on GVK power……Jst wanted ur help in suzlon too….I am holding @ 137.40….what should I do….was some research on suzlon, some say it will go to 130 very soon, some say it cannot sustain levels above 108..What do you think…

  4. S. Prakash
    Friday, August 14, 2009 at 7:38 pm

    I have 200 shares of Suzlon @ 107.30 What shall i do now?

  5. Amit Khurana
    Sunday, August 9, 2009 at 4:10 pm

    Sold at 100.Waiting for 80 and ready to short below 80.
    Thanks.

  6. KKDhanotia
    Tuesday, August 4, 2009 at 10:51 am

    This stock price will soon cross 125 level

  7. KKDhanotia
    Tuesday, August 4, 2009 at 10:50 am

    This stock will soon cross 125 level

  8. Anup Chaudhary
    Sunday, August 2, 2009 at 7:14 pm

    Hi,

    Excellent articles. Enlightening. Keep the good work up. Suggest if you could add the date of posting at the top of the blog…

    Regards,
    Anup.

  1. Monday, August 3, 2009 at 1:34 pm

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