Suzlon vs. NHPC: A Comparative Analysis of Their Share Price Trends
Suzlon Energy and National Hydroelectric Power Corporation or NHPC serve as two prominent companies engaged in the renewable energy production sector. While Suzlon Energy is engaged in harnessing wind energy for power generation, NHPC uses hydroelectric power generation solutions to develop energy. Both companies have witnessed considerable price growth as well as recent price fluctuations. The following article explores the share price trends of both companies thereby helping investors to make an informed decision regarding future investment:
1. National Hydroelectric Power Corporation (NHPC)
Engaged in the sector of generating energy using hydroelectric power generation solutions, NHPC has shown remarkable growth in terms of profitability. Moreover, when compared with Suzlon Energy, NHPC share price has demonstrated stability with price fluctuations. Following are the price trends of NHPC share price that Investors must read thoroughly:
1. Past performance:
NHPC witnessed remarkable growth in terms of an increase in the share price. Reaching the price point of ₹118.4, the company’s share price attained its 52-week high price. However, the stock price has taken a downturn in recent months nose-diving to the ₹78.5 price point. With a 33.6% fall in stock price, investors must take complete precaution before opting for future investment.
2. Recent performance:
The company’s share price has also decreased by almost 16% in the past 1 year attributed to weak market sentiment, a decrease in profit growth, and poor revenue generation. Moreover, the PE ratio stands at 26.7 which serves as a sign for premium price valuation.
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3. Dividend payment consistency:
Despite negative factors affecting the company’s performance, valuation and price movements, the company has been able to maintain stable dividend payouts with a dividend yield of 2.4%.
2. Suzlon Energy:
Considered one of the best companies engaged in harnessing wind energy for the development of electricity, Suzlon Energy has shown remarkable growth in the wind energy sector through continuous research and development and the setting up of necessary infrastructure. Despite making strides in the renewable energy development sector, the company has witnessed serious price fluctuations due to various reasons. Let’s explore the price trends of the stock and understand the reasons behind the share price downturn:
1. Downturn from 52-week high:
The Suzlon share price has witnessed a downturn from its 52 week high price point falling from ₹86.04 to ₹56.78. With a 34% fall in the share price, the stock has been able to stabilize itself but the chances of further downfall still remains.
2. Recent performance:
The stock price has delivered negative returns of 19% in the last 3 months. This serious downfall can be attributed to the reduction in profit margins, overall weak market sentiment, and market volatility. Despite delivering absolute returns of more than 1000%, the stock price has decreased considerably.
3. Long-term growth concerns;
The recent reduction in the revenue, profit and overall EBIDTA has affected the company’s share price as well. With a decrease in ROE of 1.25% and negative cash flow and EBIDTA margin, Investors are wary of the long term growth. However, a falling PE ratio is also a sign of better company valuation. Low share price combined with increase in revenue can contribute towards better company valuation.
Conclusion:
Upon comparison in the share price trends, Suzlon Energy has witnessed more volatility in terms of share price as compared to National Hydroelectric Power Corporation. Investors therefore should factor in overall business stability, company valuation, and long-term growth factors before considering investment into Suzlon Energy and NHPC.
