Suzlon Energy Limited: A Rising Green Giant

“Initiatives like discontinuation of e-reverse auction for wind, new regime being on a single stage two envelope closed bids basis is expected to lead to better tariffs discovery. There will also be a pooling of tariffs for different states, which will reduce the average cost of procurement of power.”

– Mr. J.P. Chalasani, Group CEO on Q1FY24 Results Con call

Stock Data
Ticker	SUZLON
Exchange	NSE
Industry	ENERGY

Price Performance
Last 5 Days	+2.55%
YTD	+94.87%
Last 12 Months	+153.83%

*As of 22.08.2023

Company Description:

Suzlon Energy is an Indian renewable energy company that primarily operates in the wind energy sector.Wind Turbine Manufacturing: Suzlon Energy manufactures and sells wind turbines, including both onshore and offshore wind turbines. These turbines are used to harness wind energy for electricity generation.

• Wind Farm Development: Suzlon Energy is involved in the development of wind farms. They plan, develop, and construct wind energy projects, including the installation of their wind turbines.

• Operations and Maintenance (O&M): The company provides operation and maintenance services for wind farms, including their own turbines as well as those of other manufacturers. This includes regular inspections, maintenance, and repairs to ensure the efficient and reliable operation of wind turbines.

• Energy Solutions: Suzlon Energy offers comprehensive energy solutions to its customers. This includes not only the supply of wind turbines but also energy management and optimization services to maximize the efficiency of wind energy production.

Financial Performance:

Suzlon Energy Ltd reported Revenues for Q1FY24 of ₹1,351.00 Crores down from ₹1,381.00 Crore year on year, a fall of 2.17%.

Total Expenses for Q1FY24 of ₹1,269.00 Crores down from ₹1,376.00 Crores year on year, a fall of 7.78%.

Consolidated Net Profit of ₹101.00 Crores down 95.85% from  ₹2,433.00 Crores in the same quarter of the previous year.

The Earnings per Share is ₹0.08, down 96.02% from ₹2.01 in the same quarter of the previous year.

Key Strengths:

• Expertise in Wind Energy: Suzlon Energy had a strong reputation for expertise in the wind energy sector. The company had been in the industry for several decades, which allowed it to accumulate valuable knowledge and experience in wind turbine technology and wind farm development.

• Global Presence: Suzlon Energy had a significant global presence, with operations and installations in multiple countries around the world. This global reach allowed the company to tap into various international markets and diversify its revenue sources.

• Vertical Integration: The company was vertically integrated, meaning it was involved in multiple aspects of the wind energy value chain, including manufacturing, project development, and operations and maintenance. This integration could provide cost efficiencies and better control over the quality of its products and services.

• Research and Development: Suzlon had a strong focus on research and development (R&D) to improve the efficiency and performance of its wind turbines. Innovation in wind turbine technology is critical for staying competitive in the renewable energy sector.

• Customization and Adaptability: Suzlon was known for its ability to customize wind energy solutions to meet the specific needs of its customers. This adaptability allowed it to cater to a wide range of project requirements.

• Strong Partnerships: The company had established partnerships and collaborations with various organizations, including governments, utilities, and financial institutions. These partnerships could provide access to resources, funding, and regulatory support.

Key Challenges:

• Financial Challenges: Suzlon Energy had a history of financial difficulties, including high debt levels. Managing this debt burden and maintaining financial stability was a significant challenge for the company.

• Competition: The renewable energy industry is highly competitive, with many players, including global giants. Suzlon faced competition from both domestic and international wind turbine manufacturers and renewable energy developers.
  
• Supply Chain Disruptions: Like many manufacturing companies, Suzlon Energy was vulnerable to supply chain disruptions, which could affect the production and delivery of wind turbines.

• Geopolitical Risks: Operating in multiple countries exposed Suzlon to geopolitical risks, including changes in trade policies, tariffs, and political instability in host countries.

• Operational Challenges: Maintaining and servicing wind turbines, especially those located in remote or challenging environments, posed operational challenges. Ensuring the reliability and performance of turbines over their lifespan was critical.

• Debt Restructuring: The company had undergone debt restructuring in the past, which could affect its ability to secure financing for new projects and growth initiatives.

• Cyclicality: The demand for renewable energy projects, including wind farms, can be cyclical and influenced by economic conditions and energy market dynamics.