Suzlon Energy Q3FY17 Concall Summary

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Financial Highlights

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  • In Q3, consolidated revenue is Rs3,307 crores that is 20% up on quarter-on-quarter basis and 76% up on year-on-year basis.
  • Consolidated EBITDA is at Rs. 745 crores thatis up by 27% on quarter-on-quarter basis and124% on Y-o-Y basis. The company reported a net profit of Rs. 304 crores
  • In nine months their revenue is Rs. 7,703 crores which is 24% up on Y-o-Y basis and
  • EBITDA is Rs. 1,502 crores that is 70% up on Y-o-Y basis.
  • Net profit of Rs.296 crores in nine months.
  • Their net working capital improved to 79 days in this quarter despite inventory build-up for strongQ4 and increase in debtors as a result of 20% quarter-on-quarter increase in revenue
  • Net finance cost increased in this quarter by Rs. 33 crores primarily due to temporary increase in working capital usage for volume rampup.
  • CARE Rating has upgraded Suzlon and its domestic subsidiaries as well as SE Forge credit rating from BBB- to BBB.
  • Compared to Q2, cash balance has increased not decreased
  • The plant load factor of the solar is 18% to 20%.
  • There is seasonality involved when it comes OMS business
  • The country rate of interest reduction as well as their credit rating upgrade both are positively going to help Suzlon in interest cost reduction per se and they are working on that direction to optimize their cost.
  • The company does not want to replace 3.3% annual cost debt from foreign currency torupee now.
  • The company has a mandatory conversion feature in their convertible bonds. 
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Business highlights

  • Suzlon achieved a milestone of 10,000MW of installed capacity making them the largest renewable energy company in India.
  • They have a market share of 35%
  • They are the only company with a presence in all nine windy states and we have over 14manufacturing facilities in India
  • They are the fourth largest operating and maintenance company in the entire power sector

Industry overview 

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  • Today India’s the total installed base is 28 GW by that way India is the fourth largest country in the global market and India has to deliver 32 GW to achieve by 2022 of the 60 GW that they target. 
  • Wind energy in India delivered highest installation of over 3,400 MW in FY16
  • Indian market will continue to grow by nearly 15% in the next financial year Indian market. 

 Projects

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  • Telangana is completed and the company is in advance stage of negotiations for another 130 MW
  • Order intake for this quarter is 557 MW taking their nine months’ order intake over 1 GW.
  • Order book as on date stands at 1,231 MW, which is valued at Rs. 7,523 crores. Consolidated net term date excluding FCCB now stands at Rs. 6,538 crores.
  • Will open up order book in the same level as what it was last year
  • The company expects that order inflows will start to come in FY18 from international markets
  • The company expects to deliver 14 GW to 15 GW in next 5 years
  • In Solar, the company will implement what is on hand and beyond that they will be doing only solar in hybrid mode not pure solar

Innovation

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  • Two  new  rotor  blade  factories  were  successfully  commissioned  in  Andhra  Pradesh  and Rajasthan. S111- 120 prototype is now nearing completion and the company is sure to cross the PLF north of 40%
  • Their R&D efforts are focused on bringing down the levelized cost of energy by 25% in the next five years.
  • They plan to use integrated technology and offer a wind-solar hybrid solution, which will lead to the more efficient utilization of the grid and other resource.

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