• Revenue: INR 2,093 crores in Q2 FY25, up 48% year-on-year from INR 1,417 crores in Q2 FY24.

• EBITDA: INR 294 crores in Q2 FY25, a 31% increase from INR 225 crores in Q2 FY24.

• EBITDA Margin: 14.1% in Q2 FY25.

• Net Profit (PAT): INR 201 crores in Q2 FY25, a 96% increase year-on-year.

• Order Book: Exceeds 5 gigawatts, with a significant order of 1.1 gigawatts from NTPC.

• Net Cash Position: INR 1,277 crores as of September '24.

• Consolidated Net Worth: INR 4,495 crores as of September '24.

• Warning! GuruFocus has detected 3 Warning Signs with BOM:532667.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Suzlon Energy Ltd (BOM:532667) secured the largest ever single order in the Indian wind industry from NTPC Green for 1.166 megawatts, boosting their order book to over 5 gigawatts.

• The company acquired Renom, marking a strategic entry into the multi-brand O&M sector, which is expected to enhance fleet size and profitability.

• Suzlon successfully monetized a non-core asset, their corporate office, for INR440 crores, strengthening their financial position.

• The company reported a 48% year-on-year growth in consolidated revenues for Q2 FY25, reaching INR2,093 crores.

• Suzlon's EBITDA grew by 31% to INR294 crores in Q2 FY25, with a strong EBITDA margin of 14.1% despite increased investments in organizational and technological capabilities.

Negative Points

• The EBITDA margin saw a slight decrease compared to Q2 FY24 due to increased investments in organizational buildup and technological advancements.

• The industry commissioned only 1,476 megawatts in the first half of FY25, below expectations due to monsoon disruptions.

• There was a rise in employee costs, partly due to non-cash provisions of INR32 crores for ESOPs granted to employees.

• Finance costs increased due to processing fees for securing working capital and lease rental expenses following the divestment of the One Earth property.

• The company's gross margin in the WTG segment was slightly lower this quarter, attributed to commodity price fluctuations and other cost of goods sold items.

Q & A Highlights

Q: What is Suzlon's current stance on entering the solar sector? A: J. Chalasani, Group CEO, clarified that Suzlon is not planning to enter the solar sector. The company remains focused on its core wind business. However, they are open to executing hybrid projects that include both solar and wind components if requested by clients, although no such contracts have been received yet.

Q: How confident is Suzlon about achieving the 5-gigawatt installation target for this fiscal year, given the lower capacity installation in the first half? A: J. Chalasani, Group CEO, expressed confidence in reaching close to 5 gigawatts by the end of the fiscal year. He noted that many turbines are already in the pre-commissioning phase, and the impact of monsoons, which delayed installations, is now behind them. The company expects a significant increase in installations in the second half.