Suzlon Energy: The sentiment story

Last updated on September 11, 2023

Sentiments of the market doesn’t matter for a fundamentally solid stock. Market shall eventually realise true value of every stock.

– Anonymous

Suzlon Energy rallied almost 200% in one year. To what exactly does Suzlon Energy owe this credit? Market manipulators? Gamblers? or to an emotion? Well, to be frank market is all about emotions. Sometimes it is the sentiments of gamblers that win, and sometimes emotions of retail investors. And other times everyone is crushed by the market crash. This rise in Suzlon Energy is owed to its performance and a pretty bold set of investors who believed in this company even after such a terrific stock crash. In October 2007 the stock of Suzlon Energy crashed and went from 300 to 37 rupees by the end of 2008. A few months back this stock was trading in single-digit numbers. Let’s analyze its rise and the risk associated if you think of investing in it.

One Positive News

Suzlon Energy was jumping from the 7 – 12 price range back and forth for quite some time. But, then one day some gamblers or arbitrage traders to be more professional started placing their bids on Suzlon. Just close to its quarterly results. Everyone knew the result would be positive and the result was positive for some time now. But, what was not expected was a positive set of assets. The one thing that didn’t allow Suzlon Energy to rise back to its original 300 price bracket is its net worth. The network of suzlon energy has been negative on paper for quite some time. For the first quarter in a long time, the company reported positive net worth.

And just when the result came out for March 2023 the stock exploded. A confidence boost emerged in retail investors and a strong interest in Suzlon Energy developed. The stock went from 8 rupees to 25 a 300+% rise. And it continues to rise still. This stock was on my radar but I was stuck with some other stocks and missed this opportunity. However, I did end up getting a 150% upside on a small amount that I used as an experimental investment in Suzlon Energy. And even today Suzlon Energy has a huge upside potential. It is far away from its all-time high of 300+.

Risk Associated

Even though this stock has huge upside potential. But, the entire value of this stock is based on market sentiments. Even though it has shown great stability in terms of revenue. However, the same cannot be said about the profits. The profits of this company keep being sloppy. One thing that led to its splendid growth was its positive net worth value. However, this positive value is seen in one quarter and after a long time. It can’t be said whether this positive outlook will be sustained or not. But, if this is a turnaround for Suzlon Energy’s financials it has an upside potential of 12X.

manorinfinity Written by:

Complex Problem Solver, Outloud Thinker, An Outstanding Writer, and a very curious human being

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