Key Points:
- Suzlon Energy shares fell over 4% as NSE and BSE warned of incomplete disclosures.
- The regulatory glitch overshadowed the strong performance cited in the Suzlon Energy Q4 results.
Key Facts:
- Shares fell 4.4% to ₹76.20, extending a six-day losing run.
- Warnings had been issued in view of non-disclosure of principal reasons for a director’s resignation.
- In spite of disappointments, Suzlon Energy Q4 results indicate an 84% year-to-date stock appreciation as of October 2024.
Key Background :
Suzlon Energy Ltd., one of India’s leading renewable energy companies, witnessed its shares plummet over 4% on October 3, 2024. The decrease followed the issue of advisory and warning letters by the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to the company. These were issued as the company failed to comply with disclosure norms as required by SEBI under its Listing Obligations and Disclosure Requirements (LODR).
At the center of the controversy is the resignation of Independent Director Marc Desaedeleer. Desaedeleer, in his June 8, 2024, letter, complained about a lack of transparency and an open line of communication from the company. Suzlon’s official filing did not incorporate these points nor details regarding the director’s other board memberships in listed companies—both of which are required under SEBI guidelines.
This regulatory slip caused an instant reaction from the exchanges and led to a negative reaction in the stock market. Suzlon’s stock touched the lower circuit limit of ₹75.75 on the BSE, extending a six-day fall of 8%.
Nevertheless, Suzlon Energy Q4 results paint a highly contrasting picture of the company’s operational resilience. The company’s net profit for the quarter ended September 2024 was at ₹2,006 million, a 96.1% increase from last year. Suzlon Energy Q4 results also revealed a 48% revenue growth to ₹21,034 million.
Moreover, Suzlon acquired a 204.75 MW wind energy project from Jindal Renewables, taking its commercial and industrial (C&I) order book to 907.20 MW. C&I customers now account for 59% of the company’s record order book of 5.9 GW, which was also highlighted in the Suzlon Energy Q4 results.
While the governance problem raised market concern, the Suzlon Energy Q4 results remind us of the company’s financial strength and growth momentum. To retain investor confidence, however, Suzlon will need to achieve complete regulatory compliance and tighten disclosure procedures.
In conclusion, while the Suzlon Energy Q4 results are promising and robust, regulatory discipline will be crucial to ensuring investor confidence and long-term success.
