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Suzlon Energy, a leading wind energy company, has witnessed a significant decline in its stock price following the resignation of Marc Desaedeleer, an Independent Director. The resignation, effective from June 8, has raised concerns among investors, leading to a drop of over 5% in the stock's value during morning deals on June 10.
In his resignation letter, Desaedeleer expressed dissatisfaction with the company's cooperative governance standards, particularly citing instances where communications lacked the expected level of openness and transparency. He highlighted that these issues did not meet his personal standards of expectation and speed of implementation.
Suzlon Energy's CEO has clarified that the issues raised were of a soft and process-oriented nature and would be implemented in due course. The management emphasized that all legal and financial disclosures have been fully complied with, as per regulations.
Despite the resignation and subsequent stock decline, Nuvama Institutional has retained its bullish stance on Suzlon Energy. The brokerage firm reiterated its 'buy' rating and target price of Rs 53, citing the company's strong fundamentals and growth prospects.
Nuvama Institutional highlighted Suzlon Energy's leadership position in the wind turbine generator (WTG)/turnkey EPC execution, its net debt-free status, and its strategic working capital tie-up with REC.
The brokerage firm expects Suzlon Energy to maintain its market share around 30%, driven by a strong pickup in order intake and execution.
With Suzlon Energy's improving financial position and operational ramp-up expected in FY25, the management remains focused on addressing the needs of the business first, intending to implement best-in-class suggestions in due course.
Nuvama Institutional's continued optimism towards Suzlon Energy aligns with the positive outlook expressed by other analysts. Recently, Morgan Stanley issued an 'Overweight' call on the stock, emphasizing its potential to benefit from India's energy transition and the shift towards greener energy sources.
Over the past 12 months, Suzlon Energy stock has delivered multibagger returns of over 245%, demonstrating its strong growth trajectory.
Investors should note that the views expressed by investment experts are their own and should not be considered as financial advice. It is always advisable to consult with certified experts before making any investment decisions.
Source: Suzlon Energy stock slumps 5% after independent director quits; Nuvama retains 'buy' rating