Thread: Suzlon | Fundamentally good company

Fundamental analysis of Suzlon

1. Current Market Price(CMP) of Suzlon is Rs. 51.
2. Latest Book value is Rs. 35.90.
3. Face value of Suzlon s Rs. 2.
4. At present Suzlon is a loss making company. However, IMO the company will turn around in 2-3 years.
5. For long term investment, ideally the EPS of last 7 years should be taken into consideration. Hence, avg. EPS (7 years) of Suzlon is Rs. 23 which is much better than what the present EPS suggests about this company.
6. Suzlon, Volkswind sign JV to tap Bulgaria's wind energy mkt - The Economic Times
7. Although FIIs holding has decreased a bit from 13.56% to 9.42%, but the good news is that the Promoter holding has increased from 53.08% to 58.14% this year.
8. Suzlon is value buy below Rs. 50 and best buy below Rs. 48.

Conclusion: Suzlon is not a bad company. Fundamentally Suzlon doesn't have any issues. However, I expect long sideways movement in its stock price. After that it should give good profit.

Objective: I wouldn't rush all my money at once to invest in Suzlon. Instead, I'll try to accumulate it using SIP method or during the dips over the next 1-2 years.

Suzlon touched its high point in Jan 2008 when it crossed 400. Since then it has been going down reaching around Rs.35 in March 2009. It went up to 145 in June 2009 and then again went down.

The type of business means on needs to invest for at least 4-5 years to make meaningful gains. It could be a good buy at Rs.45 and lower (it reaches such levels intra-day), provided on is willing to forget the investment for some time.

dad got a ton of this when it was Rs230 odd...he then got so so pissed that he sold it all at Rs70....oh well, $hit happens

@ rajan:

Good that your dad got rid of it. Latest update from an experienced investor is that there are too many skeletons in the cupboard of Suzlon. Only an acquisition/take-over/complete change of management can recover it.

I heard that SEBI has got a complaint about insider trading at Suzlon Energy.

I have a "lot" of suzlon and my average has now come down to very comfortable levels and I am still adding suzlon... I know this company inside out and believe very firmly that Tanti baba wont let us investors down.

I am a very long term investor though and willing to give it another 5-7 years

Originally Posted by Admin

I have a "lot" of suzlon and my average has now come down to very comfortable levels and I am still adding suzlon...

Why do you want to average more of a stock which is consistently falling? Better put your money somewhere else. Put your money to stronger sector like pharma.

I don't intend to discourage you. However, I would personally never ever Average my prices on the down side. I always prefer to Average on the upside. If you have tested your method, carry on.

One golden rule for a trader/investor (regardless of the time-frame) is that: Avoid averaging out when the price falls. Instead average in when it shows some strength.

Here is what I do... I have a set number of stocks that I add every month so the number of shares are bound to increase with time but when the price is right I sell some and pick more when it reaches major support levels keeping a strict stop loss.

I do not agree with not adding more when price comes down because if the company is good you will see the stock prices rise although it may take quite some time before you get a few baggers

So the moral of the story is that those people who keep strict stop losses and do not play around with stop losses they should buy when the price falls if the company growth story is intact.
In this market fall I have hardly lost anything because of the strict stop losses I had in place and I again have the same amount of stocks in my portfolio because I bought them again at a far lower price and with a market falling more then 10% my losses are less then 3% and because I kept buying all my stocks again as they fell I have almost the same amount of stocks in my portfolio as I had when the market was at 6200+ So basically I am a long term investor but I do play around with every fall and rise in the market to maximize my profits in the long run. Its not that I do not loose money... I loose only when I get emotional with a company or play around with stop losses.

So for example if Suzlon falls 20% today do not take it for granted that I lost 20% as well because I would have come out of it when my stop loss hits and would buy it again at whatever I believe would be a good support and this for me works very well... Its a lot of hard work though.