Suzlon Energy (NS:SUZL) is a leader in wind energy in India, which is the world’s fifth-largest wind energy market. The company, which was established in 1995, now has a global presence. Its business model has a range of services that include development, manufacturing, marketing, EPC project delivery & operations, and maintenance of wind turbine generators around the world. It is Asia’s strongest growing fully integrated wind power company and ranks amongst the top ten in the world. The company, in just a decade of its operation, has installed over 3 Gigawatt of wind turbine capacity in projects around the world. Suzlon’s emphasis on higher efficiency, reduced stresses, power quality, high performance, and reliability, low operation costs, and increased safety in delivering high-performance turbines ensures increased returns on investment.
Company background in detail:
Suzlon is a pioneer in providing end-to-end wind power solutions for the increasing demand for wind energy over the world. It has state-of-the-art R & D centers & training campuses in India. It believes in combining global experience with local expertise to maximize techno-economic value for its clients. It offers turbines in customized versions for installation in accordance with climates ranging from hot, dry deserts to humid coasts, to near-freezing plains.
Products
Suzlon S111 Wind Turbine: The S111 Wind Turbine Generator with a rotor diameter of 111.8 meters has been designed for higher energy generation and better return on investment. Suzlon S120 Wind Turbine: Built on the highly successful 2.1 MW platform. With S120, Suzlon has yet again redefined the benchmark and built a world-class product specifically for low-wind sites found commonly in India. Suzlon S128 Wind Turbine: India’s largest wind turbine with a hub height of 140M and swept area of more than 13,000 sq. mts, the S128 is shifting the paradigm in the market.
Corporate action and announcements
As of 24th May 2023: Suzlon Group has bagged a significantly large order for its new 3 MW series of wind turbines to develop a 300 MW wind power project for Torrent Power (NS:TOPO). Suzlon will install 100 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each. The project is located in Karnataka and is expected to be commissioned in 2025.
This was the sixth and the largest order for the new Suzlon 3 MW series in less than a month and as part of the agreement, Suzlon will supply the wind turbines (equipment supply), provide land and execute the project including erection and commissioning. Suzlon will also provide comprehensive operations and maintenance services post-commissioning
Previous 5 orders secured in May 2023:
No 5) Suzlon Group wins 204 MW order from Serentica Renewables (22nd May 2023)
No 4 ) Suzlon Group wins order for the development of wind power project for SKMEPL (19th May 2023)
No 3) Suzlon Group secures order from leading Nordic Energy Company (19th May 2023)
No 2) Suzlon Group secures new order of 99 MW from Vibrant Energy (17th May 2023)
No 1) Suzlon Group secures order for 3 MW series turbines from Juniper Green Energy (3rd May 2023)
As of 5th June 2023: Suzlon becomes the first Indian wind energy company to reach 20 GW of worldwide Wind Energy installations. Suzlon Group has crossed the 20GW wind energy installations milestone through 12,467 wind turbines installed across 17 countries spanning six continents solidifying Suzlon''s position as a significant player in the global wind energy landscape. As India’s leading and pioneering Indian renewable company, Suzlon has built the Indian wind energy sector since 1995. Suzlon Group has become the first Indian wind energy company to reach 20 GW of worldwide Wind Energy installations.
Q4 result updates as of 31st May 2023
Suzlon posted a consolidated net profit of Rs 320 crore during the quarter on the back of lower expenses. It had incurred a consolidated net loss of Rs 193 crore a year back, according to a regulatory filing. Consolidated net profit for FY23 stood at Rs 2,877 crore as against a net loss of Rs 166 crore in FY22.
Total income from operations fell to Rs 1,699.96 crore in Q4 from Rs 2,478.73 crore a year ago. Total expenses declined to Rs 1,628.39 crore in the March 2023 quarter from Rs 2,511.70 crore a year ago.
At the operating level, EBITDA jumped to Rs 233 crore in the fourth quarter of this fiscal year, compared to Rs 192 crore in the corresponding period of the previous year. The EBITDA margin for the reporting quarter stood at 13.8 percent, against 7.9 percent in Q4FY22. EBITDA represents earnings before interest, tax, depreciation, and amortization.
Annually, revenue fell to Rs 5,947 crore in FY23 as against Rs 6,520 crore for FY22. Further, the net debt position of the company improved substantially to Rs 1,180 crore in FY23 from Rs 5,796 crore in the previous fiscal year due to rights issues and refinancing accomplished during FY23. There has also been a reduction in net finance costs by 44 percent on a YoY basis
Shares of Suzlon Energy rallied nearly 9 percent in the afternoon on 31st May 2023 as the shares opened at ₹10.92 on the BSE and touched an intraday high of ₹11.80 and a low of ₹10.64 and was trading around its 52-week-high level after the company announced strong numbers for the quarter ended March 2023.
Conclusion:-
Suzlon won a lot of orders in 2023 and also reconstructed its Debt in recent times; And especially today - intraday, the traded volume on NSE was ~ 143 Cr shares. Which is attracting small investors to earn quick money because of such rising volumes. However, the point to remember is that the setup of wind energy is time-consuming and the initial cost is also very high.
Therefore the stock can witness a further up trend if they win more orders and cross the 25 mark before Diwali of 2023 otherwise we can witness the stock prices to crackdown till 9 or 10 rs for further accumulation. But if the company will post losses in the upcoming quarterly results then the stock price can even fall below the support level of 9.
Disclaimer: The above article is for self-educational purposes. The analysis was conducted by the following students: G10, Anantji & Yoggeta for learning purposes.
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