Suzlon Energy Ltd (NSE: SUZLON) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
JP Chalasani — Chief Executive Officer
Himanshu Mody — Group of Chief Financial Officer
Analysts:
Sumit Kishore — Analyst
Puneet Gulati — Analyst
Mahesh Patil — Analyst
Deepak Gupta — Analyst
Shweta Dikshit — Analyst
Ashish Aggarwal — Analyst
Dhaval Doshi — Analyst
Arun — Analyst
Rajendra Choudhary — Analyst
Unidentified Participant
Shiva — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Sislan Energy Limited Q4 FY ’25 Earnings Conference Call. During this call, the company management may make certain statements that reflect the outlook for the future, which could be constructed as forward-looking statements. These statements are based on the management’s current expectation and are associated with uncertainties and risks as detailed in the annual report. Actual results may differ, so these statements should be reviewed in conjunction with the risks the company faces. As a reminder, all participant lines will be in the listen-only mode. And if you need assessions during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note this conference is being recorded. We will begin the opening remarks, followed by the Q&A session. To be fair with the others, we kindly request each participant to ask no more than two or three questions. From the management, we have with us Mr J.P. Chalsani, Group CEO; and Mr Himanshu Modi, Group CFO. Over to you, JP Chalasani, sir. Thank you.
JP Chalasani — Chief Executive Officer
Thank you. Good evening, everyone, and thank you for joining us for Annual Lending Conference call. This year marks a significant milestone for us. It is our 30th anniversary. Over the past three decades, has demonstrated resilience, innovation and a forward-looking spirit that continues to guide us. We extend our sincere gratitude to everyone who has been part of this long journey. To our visionary leader, to committed leadership, passionate employees, live customers and dedicated partners. A special note of thanks to our investors and analyst community for your unwavering trust and continued support. Thank you. So talking about the industry, the draft notification on inclusion of the updating of wind turbine generators on the RLMM will give a big boost to the domestic supply-chain with the local manufacturing of blades, tower, cables and generators.
Moreover, it also requires that the R&D and data centers to be placed in India as the most integrated domestic OEM — sorry, as the most integrated domestic OEM with an in-house R&D, is fully compliant with and well aligns the government’s current policy direction. Thank you. We are pleased to report that another record-breaking quarter marked by an all-time high order book exceeding 5.5 gigawatts, reaffirming our leadership across PSU, C&I and utility segments. Notably, secured 1.5 gigawatts as the sole winner of NTPC’s PSU tenders, underscoring our continued focus on product quality and alignment with evolving market dynamics. Our order book for the S144 model now exceeds 5 gigawatt, a testament to superior technology and strong customer confidence.
We take pride in stating that S144 is truly a made in India made-for India product. I repeat, it is a made in India, made-for India product. On the manufacturing front, our capacity now stands at 4.5 gigawatts with both national facilities in dominant and fully operational. We have also expanded our great manufacturing footprint with new plants in Madhya Pradesh and Rajasthan, ensuring we are all — we are well-positioned to meet production requirements for the coming year and beyond. Stunning execution since has set a new performance benchmark by delivering a record-breaking 1,550 megawatt this year, more than double the megawatts delivered last year.
The industry commissioned around 4.2 gigawatt in FY ’25, though 28% growth is there, it falls short of expectations due to transmission and land acquisition challenges. However, with over 2.5 gigawatt commissioned in March last year and April this year, combined signaling a positive shift in execution pace. At, we commissioned 336 megawatts in FY ’25 with an additional 370 megawatt erected WT is currently in the pre-commissioning phase, bringing the total to over 707 megawatt. With less than 30% of our order book comprising non-EPC projects where land acquisition lies outside of scope, client side delays have impacted commissioning timelines.
To address this, we have prioritized projects with partial land availability upfront. Looking ahead, projects like NTPC come up with substantial land readiness offer greater commissioning visibility for FY ’26. Additionally, is actively pursuing a long-term strategy to mitigate land-related delays by developing active project pipeline. Our business continues to do well with more than 15 gigawatts capacity in India with machine availability ensured above 95%. Renome, our new entry continues to strive for customer fleet acquisition with assets under management crossing 3 gigawatts. Our forging and foundry business started showing uptick in the last two quarters and we expect to continue this trend in FY ’26.
Our top priority remains the timely execution of our robust order book, while maintaining the highest standards of quality and ESG. I would now like to invite Himanshar to take you through our financial performance. Thank you, JPC, sir, and good evening, ladies and gentlemen. As always, I would be using slide numbers 18 to 26 of our investor presentation, which has now been uploaded on our website as the reference point for my discussion during this presentation. FY ’25 has marked a transformative year for defined by remarkable achievements with highest-ever revenue, EBITDA and PAT post FY ’17. Our entire team demonstrated unwavering — our entire team demonstrated unwavering dedication, making this one of the most successful and memorable year in our journey so-far. Taking you through the Q4 FY ’25 numbers, in Q4, continues its exponential growth trajectory delivering 573 megawatts, which is almost 2x on a year-on-year basis with all financial parameters showing a strong uptrend.
Recorded consolidated revenues of INR3,774 crores, delivering a strong 73% Y-o-Y and 27% Q-on-Q growth of Q-on-Q growth. EBITDA for Q4 FY ’25 stood at INR693 crores, marking a 95% Y-o-Y growth and a 39% increase Q-on-Q basis. EBITDA margin improved by 200 basis-points to 18.4%, up from 16.4% in the same quarter last year. Achieved the highest-ever quarterly PAT of INR1,181 crores. This of course includes the deferred tax asset recognition, which we’ve done in this quarter of about INR638 crores. Taking you through the full-year FY ’25 numbers, FY ’25 marked a key inflection point is for as the benefits of operating leverage in the WTG division have begun to materialize.
The WTG division revenue surged by 101% from INR4,215 crores to INR8,481 crores, driven by 118% increase in deliveries from 710 megawatts to 1,550 megawatts this year. This operational momentum translated into a remarkable 392% growth in EBITDA for the WTG business, underscoring the strength of Suzvan’s scalable business model. Notably, WTG contribution margin has surpassed our earlier estimates of 20% by 360 basis-points to 23.6%. On a consolidated basis, delivered a strong performance in FY ’25 with revenue surpassing INR10,000 crore mark to INR10,851 crores, which is registering a 67% Y-o-Y growth, 67% Y-o-Y growth.
So EBITDA is INR1,857 crores for FY ’25, which is a surge of 80% on a Y-o-Y basis with improvement in EBITDA margin to 17.1% from 15.8% in FY ’24. Reported a robust PAT of INR2,072 crores after exceptional items and including the impact of deferred tax asset recognition, marking a 190% Y-o-Y growth. This strong performance reinforces our confidence that The company has firmly transitioned into the next phase of its operational turnaround following a successful financial revival nearly a year-ago. We are pleased to report on our balance sheet as of March ’25 reflects a strong position of exceptional strength with a consolidated net-worth of INR6,106 crores. Our net cash position has risen to INR1,943 crores, marking an increase of INR836 crores over Q3 FY ’25, which further enhances our financial flexibility and resilience. Our end-to-end wind energy model backed by a fully-integrated supply-chain and a proven execution track-record with best-in-class service has offered offers a competitive edge that’s both unique and hard to replicate. Moving on in terms of an outlook for FY ’26, has made significant progress in operational excellence initiatives in FY ’25 and has got full support of various stakeholders as mentioned by JPV sir earlier. The outlook for the future looks very promising with a strong order book in-hand, proven execution capability, a strong management bandwidth and working capital facilities tied-up.On the back of all these pillars, as we look-ahead for FY ’26, we are confident of achieving 60% growth across all key parameters in FY ’26 over FY ’25, which in any case meets all analysts expectations or estimates made by the — about eight analysts that we have. With that, I’d like to conclude my presentation and open the floor to any questions that the callers may have. Thank you.
Questions and Answers:
Operator
Thank you. Thank. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the. The first question is from the line of Sumit from Axis Capital. Please go-ahead.
Sumit Kishore
Good evening, my compliments on a strong performance in FY ’25. My first question is, first, what are your thoughts on the order inflows in FY ’26 after the strong show in FY ’25? Are you likely to match the past inflows in the and how are you thinking about considering.
JP Chalasani
Are you audible Chorus call?
Operator
Yes, sir, you are audible. Hello. Can I go-ahead management, sir, can you hear me? Hello ladies and gentlemen, please stay connected. The management has been disconnected. Please hold while we reconnect them ladies and gentlemen, the line for the management has been reconnected. Yes, Sumit sir, please go-ahead.
JP Chalasani
Good evening. My compliments on a strong performance in FY ’25. My first question is, if you couldn’t share your thoughts around the order inflows for FY ’26, would it be possible to match or surpass the QC deliveries and contribution margin for WTG pan-out in FY ’26? That’s my first question. Sumit, we just lost in-between for a second. Can you just repeat?
Sumit Kishore
We heard about the order book after my questions are on your thoughts around order inflows, deliveries and contribution margin for FY ’26.
JP Chalasani
Order inflow, as we speak, we continue to see the good momentum and we are pretty confident the order inflow will continue to a little bit more accelerated compared to what we have seen in the last year. Looking at the current visibility, why I say that is the — as you know that we started now the public sector as one song segment which is now almost contributes 26% of our order book is opening up as we all speak. There are a couple of tenders that was 1.4 gigawatt already open with NTPC and lastly, we won NPPC, BPCL both and more-and-more those orders will come. And we are also in the process of discussing with various other people. Plus the — our development pipeline what we started will now get converted into EPC.
So on your first question, Sumit, yes, we continue to see the traction. We will continue to see the traction quarter-on-quarter basis on the order book. I’ll again repeat my statement earlier that I don’t think the order book not being irrelevant, not being overconfident or at least the next 18 24 months, I don’t see the orders becoming an issue for us.
Sumit Kishore
So it’s a question of ramping-up the exhibition capabilities to meet the project readiness for supply of turbines. So that’s how it is. On the margin?
JP Chalasani
Yeah. So Sumit, on the margin for the WTG business, as we mentioned, we registered about 23.6% of our contribution margin. So I would say going-forward for FY ’26, we would — we should be able to maintain a 23% margin on a contribution basis for the WTG division. And in terms of deliveries, deliveries, that was the next question. As I mentioned earlier on that we are confident that we’d be able to achieve approximately 60% growth year-on-year across parameters. So I think which is in-line with most estimates. So I think we stand-by that for deliveries.
Sumit Kishore
Sure. And could you speak about the progress of the land development mode as a strategy to secure contracts in FY ’26 in the PC mode? How much can we expect via this route and what progress has happened so-far? And any groundwork leading into export opportunities for WTG over the next 12 to 18 months?
JP Chalasani
And on the development side, if you remember we’ve seen on records that earlier that in the states of AC, Ajasthan and Madhya Pradesh, and including Karnataka. So we also said that we don’t announce, but we get into these framework agreements for development of the. So some of those things are now getting converted into EPC contracts for as we speak. So therefore, I don’t want to put a number to it, but you will actually see some EPC contracts being announced out of this development pipeline in this year, which will keep increasing as we move on quarter-to-quarter basis.
So therefore, that’s one what I will talk about. The second one what you said?
Sumit Kishore
Whether exports over the next 15 to 18 months, whether you are.
JP Chalasani
Yes. You’re seeing what’s happening on the tariff barriers and various uncertainties, whatever is happening. Obviously, as we spoke sometime back, the geographical diversification after meeting the increased demand in India is always option available on the table. And-answer to that question is, would we be prepared? Yes, we would be prepared. Would we be doing it? Let’s wait-and-watch for the time. But as 18 24 months, we would definitely be prepared to — in case there is a requirement beyond our capacity beyond our — whatever we can supply here there is much capacity, we will definitely. But at this stage, answer is not affirmative, but preparedness wise, yes, are moving in my direction.
Sumit Kishore
Thank you so much.
JP Chalasani
Thank you.
Operator
Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go-ahead.
Puneet Gulati
Yeah, thank you so much and congratulations on great numbers. My first question is on your new product development. So you have bulk of your pipeline coming from S144. So where are you in the next leg of development For higher voltage turbines and do you even see a need for that or are you happy with this product at this point of time?
JP Chalasani
Actually we work-in different environment in India is we don’t react to the market, we actually create the market. And I say we create the market is the — you need a product to suit the market at different points of time. So as you know that we have the concept of setting up wind mass every single year to identify what is the win date data for the future sites, let’s say, two to three years down the line. Even as we speak, in FY ’25, we had put 16 in different countries. And in addition to those eight Windy states, in fact, we’ve opened up one more state in the Eastern sector, I just don’t want to name it, but — so we are opening up.
So these sites are clearly giving us a visibility of what product is required in next two to three years and we are ready for that. Current product, whatever is coming, S144 is the product which can easily meet the demand of the current market requirements in terms of both technology as well as pricing. What you can expect is that could be a variant of 144 coming in, you know, like this platform areas. But for the next model to come in, it will definitely be there as and when the country needs in terms of tariff not going up, okay. So like I keep always giving example the most important tariff. So like in AP, I always say the example is that we sold 1,000 megawatts of one in FY ’17. But say in AP today, we can’t call us because the tariffs are different. That was 4.8 for today tariffs come down to 3.6, 3.7. So therefore, we need a 3 megawatt platform.
So the answer to that is, if the next model will be ready, but will be ready as and as required.
Puneet Gulati
Okay. Understood. That’s helpful. And secondly, we also keep on hearing lower wind speeds. And what do you think is a solution? Is there a better product needed or do you think that’s what developers will have to now factor-in their estimates as well?
JP Chalasani
No, no. There are two different things. The sites in future, which are coming in could have a different wind receive. That’s one part of it. Second is the existing sites where you already set-up the projects, people talking about the wind is not coming the way it was expected when the plants are set-up, which will contribute to different issues. So on the first category of a fresh site coming with the low wind, obviously, the new product is required which could be — it is megawatt is not an issue, okay? And because normally we think that 5 megawatt, 6-megawatt watt is required.
No, that doesn’t make the difference. What makes a difference is your rotor diameter and your upheight. So what is required for the low wind sites, not the megawatts, okay. So at the end-of-the day, what gives the lowest-cost per kilow whatever. And as far as the existing sites are concerned, bring it very clear to everyone that as long as you have taken proper estimates with data available for two years okay. So therefore variability will be less, but still on the wind, the average would touch around — it takes about seven-year period where you get event out and then you get exactly the PLF of what you for it. Year-to-year variations cannot be counted in of wind.
The wind itself is a cycle of seven years, which is known. In fact, even when we do the analysis, we do it for the entire life of the project and then you will get the same at the end of it. But the quality of wind data when you selected a site becomes very, very important. So you got to have those win marks, you’ve got your two-year data. If you have selected the site from somewhere where you don’t have proper win data and you made a mistake, then you made a mistake.
Puneet Gulati
Understood. That’s very helpful. And lastly, for your new upcoming orders that you’ll be participating, do you see a higher share of utility-scale projects or more C&I coming in from the rent side?
JP Chalasani
So if you see today, our C&I continues to grow, while the percentage-wise, if you see there is a slight shrinkage that only percentage-wise because of public sector has grown significantly. Otherwise in absolute terms, the C&I continues to grow. We expect C&I — the growth rate will remain the same like what we have seen earlier. The public sector will continue to increase for us. And obviously the bid availability will be there with project finished, but that’s depending upon the competition, whatever we can increase. But in order of magnitude-wise, the C&I, the PSU ESU and the bid. I don’t Call-IT the utility is a bit again your two categories of people. Utilities which are participating in the bidding, they’ll continue — we’ll continue to grow with them.
Puneet Gulati
Understood. And lastly, one more if I may. You know, we — on the wind side, there is also a bit talk of movement towards solar plus BASS. Does that worry you at all? Or do you think the hybrid product is still stable.
JP Chalasani
So at the end-of-the day, you need to look at you know when is a demand and what is the tariff, okay, from the point of grid is offering today. And we have all clearly seen that the — in the solar hours, the tariffs are not touched to zero number of times.
Puneet Gulati
Yeah.
JP Chalasani
And also if you see, it is not just the tariffs alone, the grid stability wise. So almost about 20% of the time in FY ’25 second-half, that is October to March, the grid has seen a frequency going beyond the norms, okay. So therefore, obviously, there is nothing called the business period solar increasing. Now at the same time, if you see in the evening peak and other peak hours, the demand is going up. In fact, there is a prediction that the shortage of capacity even in July and August. Whether it is solar plus, it is other solar or wind is immaterial. What — which product gives you depending upon when you want power, that is what will happen. So therefore, the whether the wind is cheaper or the solar is cheaper, the best is cheaper is not the issue, which is at what point of time, what is the load curve, at what point you want power, which offers the lowest combination to be there.
All three will be there, four exist, but the design of the product would change depending upon what products are you asking for, are asking for around-the-clock, are asking for modeling. So what are you asking for? But I don’t see — to answer you simply, I don’t — at least I personally don’t see any risk of based in the power sector of wind getting impacted because we have solar that won’t happen. But combination will need to be there.
Puneet Gulati
Understood. That’s very helpful. Thank you so much and all the best.
JP Chalasani
Thank you.
Operator
Thank you. The next question is from the line of Mahesh Patil from ICICI Securities. Please go-ahead.
Mahesh Patil
Yeah. Hi, sir. Congratulations on a good set of numbers. Sir, my first question is on this RLMM norms that have come in, right, which mandate the domestic procurement of towers, blades, gearbox and generators. So just wanted to understand in terms of the capacity that we have or the procurement that we do, how are these four products, are we procuring? How much percentage of this is being procured domestically? And if there is some portion that is not then what are our plans to do that?
JP Chalasani
And let me just give you the sector-wise in terms of parallel, the notifications came on 70 basis, just talk only about the domestic manufacturing. We talked about domestic manufacturing, we talked about cyber security. We talked about having R&D in India so that you design your turbines to meet Indian conditions in terms of temperature or around. Okay. So your question basically the first one. I’ll answer to the first one. These four products, what you said, if you look at, first of all, the OEM capacity in the country, these are all numbers returned to MNRC by various OEMs. Back up to OEM capacity today is 20 gigawatts in the country. The carebox capacity is 29 gigawatts in the country. What the different manufacturers, different government manufacturers.
Mahesh Patil
Hello. Can you hear me? Can you mute yourself, please? Yes, sir. Sorry, sir, there was some disturbance. Can you please repeat this capacity portion just?
JP Chalasani
OEM capacity is 20 gigawatts in India, installed capacity to supply turbine the gearbox capacity is 29 gigawatts in India amongst three major gearbox suppliers. When you’re talking about gearbox capacity, it also includes miss within India. And then you were — the blade capacity is 28 gigawatts, which includes 11 gigawatts of third-party blade manufacturers, okay, means they can manufacture blades for any volume, their volume agnostics, okay. And then the generator manufacturing capacity of almost about 14.5 gigawatts, okay.
This is the capacity of what is available in India. Therefore, in our opinion, the capacity not being available of projects getting delayed is out of question. And the second is that The price is going up, these are two things what we should be hearing. It’s out of question. Because the same set of people, if the capacity utilization increases, the prices will actually fall. Okay. So if today we have a castings business in this country, which is being used for 25%, if the 25% goes up to 60%, our fixed-cost per competit will come down so much, obviously, we can offer much cheaper. And we had a over generator factory, which we sold up at some point of time today not being operational, not even single generator is getting manufactured because it’s not demand. So these component manufacturers, if the demand goes up on them, the consistent demand is there, the prices are going to fall. So there is an adequate capacity. There won’t be any issue in terms of disturbance in terms of supplies or the cost will not increase. That’s what we’ll be doing. And as far as we are concerned, we completely comply with these conditions. We have no issue with respect to meeting all those conditions, whether it is manufacturing or it is cybersecurity or it is R&D. We are completely compliant today and we have no problems at all. And that’s what we’ve written to Government of India saying that we welcome this and we actually support this.
Mahesh Patil
Sure, sir, sure. Sir, one related question is when — so you have mentioned that we have enough capacity in India itself. But when we look at the competition also, so that means they will likely will not face any challenges. So because what I’m referring to is that eye of paper wherein the compliance was mentioned as lower for some of the other peers. So I was just thinking, do we have any advantage — competitive advantage here because of this or but there is enough capacity, so there may not be anything like this, right?
JP Chalasani
No, the advantage is that if it is a domestic manufacturing and the domestic procurement, we as an Indian company would in India will have a level-playing field. Compared to some other people who are getting some products which may — they may look initially cheaper, but I don’t think they will have a similar lifecycle cost. So therefore, what would happen, this is advantage to us is that we will be competing on the same ground with everybody today in the country. So that’s what I look at this whole thing is. In our own country, we will get the level-playing.
Mahesh Patil
Okay, sir. Got your point. And sorry, sir, I missed that part where you gave guidance for FY ’26 order inflow. So that — and one related question is, I think we have a capacity of 4.5 gigawatt, right? So do we have it sufficient to meet this demand or are we doing something on the capex side as well in next 5 gigawatt?
JP Chalasani
Yeah, 4.5 gigawatts is what can be supplied when there is a bit of an inconsistent demand on quarter-to-quarter basis. There is a consistent demand with improvement in productivity. This 4.5 actually without adding any further manufacturing capacity can deliver 5.5 gigawatts existing capacity. But then provided you have a consistent demand and you know that’s going to be taken and then we can improve the productivity of if you do a three-shift operations and everything same capacity can deliver 5.5 gigawatts.
But then what happens is 1/4 you have 1 gigawatt demand and second-quarter you have 2 gigawatts demand and that variation, that’s where we say that gigawatts of capacity and we’ve been on record and Himansh also said number of times that for us to enhance further capacity required is — we don’t need to enhance the natural capacity. It’s a question on the plate. You can always add more molds. So which is not a high capex, it is not a capex incentive — intensive or not it meets the time. So therefore, the demand capacity is not a constraint for us.
Mahesh Patil
Okay, sir. Got it. Got it. Thank you. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Deepak Gupta from JM Financial. Please go-ahead.
Deepak Gupta
Good afternoon, sir. Thank you for taking my question. My first question is on the guidance that you’ve given for FY ’26 in your opening remarks. Did I hear it correct that you’re looking at 50% growth across all operating parameters? And if you could specify what operating parameters are you specify?
Himanshu Mody
So hi, we mentioned we’re looking at about 60% growth across the parameters. So be it RR as we Call-IT our deliveries or revenue, EBITDA, normalized PAT, of course, not taking into account the one-off DTA. Across all these parameters, we are confident of a 60% growth in ’26 over ’25. Only exception would be COD, which will be much higher than 60% because obviously this year was a low year for us. That’s the only exception, which we will have multiple times more than what we have done this year.
Deepak Gupta
And what is the current deferred tax asset on the balance sheet?
Himanshu Mody
So currently, we’ve created a deferred tax asset of about INR638 crores in this quarter. So we’ve created this on the back of assessed losses. So assessed losses in the books are about INR2,500 crores. So clearly, as per the IndAS 12, which provides that now that there is a absolute certainty of profits in FY ’26 for the corporation. Based on the assessed losses that we have, we’ve taken the DTA at INR638 crores. Of course, there is additional losses that are available in the books, but those are not assessed as yet as and when those assessments get completed and based on how the company tracks along, there could be a possibility of creating further DTA as well.
Deepak Gupta
Understand. So therefore, there will be likelihood of no tax liability for the next few years. I won’t say three years.
Himanshu Mody
I mean, clearly, the DTA that we’ve created would start getting charged into the P&L from Q1 of this financial year itself. So whilst it will be a P&L charge, there won’t be a cash outflow. And basis the performance in FY ’26, our — our belief is that a large part of the DTA that’s been created in Q4 shall get absorbed during the year in FY ’26. Of course, if there’s any new DTA that gets created is contingent upon a complete the assessments of the losses getting — getting assessed by the department.
Deepak Gupta
Understand. And just last question from my end. As I look at your quarterly numbers, you’ve shown a sharp improvement in our EBITDA margins for the quarter despite your contribution margins coming off meaningfully, largely led by lower employee expenses. If you could give us a sense, how do you see EBITDA margin shaping up on a full-year basis on a consolidated basis in the coming years?
Himanshu Mody
So EBITDA margin on a consol basis for the full-year this year has been about little over 17% and we would maintain that for FY ’26, we would also be around the same 17% margin for the full-year FY ’26. Now, of course, when you look at the contribution margin, you know that shifts because as the WTG business volumes or numbers increase, which is a lower contribution margin business as compared to the OMS, the consolidated contribution margin would see a reduced number in terms of percentages.
So if you look at our consolidated contribution margin for FY ’25, that’s about 33.7%, which is about a little lower as compared to 36% in FY ’24. That’s purely because we’ve doubled the WTG division in terms of deliveries in FY ’25. And as we move along in FY ’26, with the growth that we’re expecting in the WTG division, that contribution margin will come down while the consolidated EBITDA margin will be able to maintain.
Deepak Gupta
Sure. Okay. Thank you so much.
Operator
The next question is from the line of Dixit from Systematix Group. Please go-ahead.
Shweta Dikshit
Hi, good evening. Thank you for the opportunity. Sir, my question is, what is your — what are your thoughts on longer-term growth trajectory in terms of delivery? We agree that we’ve been guiding to 50% growth for FY ’26, but if we broaden our horizon if we look beyond FY ’26 maybe FY ’28,, what could be the growth that is in your vision at this point? Thank you.
JP Chalasani
See, we gave a guidance for FY ’26, so therefore, obviously, FY ’27, FY ’28 as we move ahead, we see it. As we see today, obviously, there is — while we don’t — we give the guidance beyond the first year. But if you look at the sector that we say directionally, we are at 51 gigawatts today and then we want to touch 100 gigawatts. We can always argue that it will be will be 85. Even if you take the lowest of 35, we are talking about an average of 7 gigawatts per year in India.
So therefore, you can see that there is going to be continued growth of compared to FY ’26, expectation is FY ’27, the capacity addition in the country will be higher and 28 will be still higher. So till 30%, you will see year-on-year growth in. So it’s reasonable to expect that there will be growth Rates, but what and how much is the — I don’t think we are in opportunity give guidance at this stage. Directionally, yes, we’ll continue to grow.
Shweta Dikshit
Thank you. And sir, next question, just want to understand what’s happening on the.
Operator
I’m sorry to interrupt. MR. Ms, can you speak a bit loudly, please?
Shweta Dikshit
Hello. Yeah, yeah. Am I audible?
JP Chalasani
Yeah.
Shweta Dikshit
Understand your thoughts on what’s happening on the replacement market. What is like how is this market expected to turn-around in the next coming years? Next few years since a lot of older turbines are still in-place and what exactly is happening or could be expected in that market segment?
JP Chalasani
See, there are two types of repowering potential what we’re seeing. One is the — is you don’t change much increase the capacity by maybe replacing your just a other or the. That’s one-type of thing. We are working on a product for that, which can replace can increase the capacity of some of our volted turbines in sort of lesser capacity. So that we marked there is a significant amount of potential for that and which we would see that tapping into the potential or maybe starting towards end of this year and but picking-up next year. Second type is that the repowering is clearly the where there is a of which the lives are approving completely the existing turbines and because these sites are of high-capacity, high wind replacing them with the latest turbines with much higher efficiency.
So that will take little longer time because currently everyone is preferring the working sites because the cost of uproating and their SGU connected sites, whether we have a market for that, I think that will take little lag time. But the first one, what is their retiring is going to start and then we expect that to make some start this year, but we will see traction for that in FY ’27 and FY ’28.
Shweta Dikshit
So any chances of quantify this number in terms of megawatt.
JP Chalasani
Right now it’s in the beginning stage let’s wait-and-see that first thing is to make a start, okay. So then we can start estimating how much will be for FY ’27, how much will be for FY ’28.
Shweta Dikshit
Okay. Thank you so much.
Operator
Thank you. The next question is from the line of Ashish Agarwal from Sundram AMC. Please go-ahead.
Ashish Aggarwal
Yeah, thanks. I hope I’m audible. Yeah, please. Sir, three questions from my side. First, first of all, when you gave a guidance of 60% growth even in EBITDA, given your contribution should be growing at more than 60% directly, your EBITDA should be growing faster, given your fixed-cost will not be growing at the same direction. Just wanted to understand where we are missing this thing.
And secondly, on the segmental margins on the business, it seems like that the margins have grown very sharply. So anything one-off in that one should be aware of? And lastly on the balance sheet, there has been a very sharp increase in contract liabilities. What is the reason for this?
Himanshu Mody
So hi, Ashisha. So to answer your first question on the 60%, when we say 60% across all parameters, we went a minimum of 60%. Yes, you’re right in your estimates that the EBITDA growth would — or rather could be higher than 60% based on the logic that you drew up in your question. So when we gave a guidance, we’re saying that it would be a minimum of 60% across all parameters. That does not necessarily mean that it will be exactly 60% across all. Because like I said that will be much different, commissioning of the is much higher than 60%. So read that guidance of 60% as with minimum as before it.
JP Chalasani
To answer your question on the OMS margins, if you look at our contribution margin on the OMS business, that’s about for the full-year, 68% that we maintained. Last year it was about 66.7%. And if you look at the Q4 this year, it’s about 69%. Now of course, I’m not sure which exact numbers you’re looking at, but also keep in mind, we’ve also started having Genom, which would be a separate division of multi-brand O&M. That would take the consolidated O&M division margins down if we put Renom as a division also as part of the O&M, which so-far we haven’t.
But there are no significant one-offs. The margin guidance on O&M business we continue to maintain would be in the late 60s at the contribution level and at about 40% from an EBITDA perspective.
Ashish Aggarwal
Sorry. Sorry, what I meant was on the P&L, right, on the consolt P&L, if we look at the segmental sort of profit, it seems like that the segmental margins in O&M has declined from roughly 38% to 26%. That’s our.
Himanshu Mody
No, no, no, that’s O&M margin, if you’re looking at it along with Renom, then yes, it would have declined along with Renom and International. When we report the 38% operating margin, that is just the India O&M. But when you look at the segmental in the REG 33 results that comes along with the international O&M also, which takes the margins down. But that business is very small for us. So you should just look at the India O&M, which is if you look at the investor deck and not the 33 results, you will be able to correlate the two numbers.
Ashish Aggarwal
Yeah, because in the investor presentation, it’s even 40%.
Himanshu Mody
Yeah. But my suggestion or would be that whilst, of course, I cannot — we cannot ignore the, but for the true segmental India O&M margins, please look at the investor deck presentation. And I mean, if you have, of course, any detailed follow-up queries on that, we can do a one-on-one follow-up call.
Ashish Aggarwal
I’ll look at the absolute number.
Himanshu Mody
Yeah. And with regards to your last query on the liabilities. We’ve created about close to INR900 crores of liabilities on the balance sheet. That is on account of two events. One is of course a the additional stake buyout of — of Renom. As you know, we bought 51 — a little over 51% during FY ’25. There are certain put-call options that have been built-in when we signed the original SHA. So approximately about INR400 crores of liability, contractual liability has been built on that count and another close to INR400 crores has been built on account of the One Earth, which is the Pune-based headquarters that we have, wherein the — we have a put-call option that kicks-in about 12 to 18 months from now.
So based on these two contractual liabilities which are probably more than a — more than one year down the road, we’ve created those liabilities in the books.
Ashish Aggarwal
Got it. Thanks a lot.
JP Chalasani
Thank you.
Operator
Thank you. The next question is from the line of Dhaval Doshi from Asia. Please go-ahead.
Dhaval Doshi
We congratulations team on a super set of numbers. My questions have been answered. So thanks a lot. When you were referring to the analyst estimates for giving guidance. Thanks. I will learn from you. Thanks so much guys and all the best.
JP Chalasani
Thank you very much.
Operator
The next question is from the line of Arun from Investments. Please go-ahead.
Arun
Yeah. Hello. Can you hear me?
JP Chalasani
Please go-ahead.
Arun
Yeah. So first of all, congratulations on a very good set of numbers, sir. I wanted to understand on like why the cost — like the gross profit margin has come down in this particular quarter and I see that the cost of raw materials is higher, right? So what is the reason for that? And also similarly for the finance cost as well?
Himanshu Mody
So again, Arun, as I mentioned earlier, as the share of the WTG division in the consol numbers keeps increasing in absolute rupees crores basis, the consol contribution margin will keep coming down because the WTG business has a contribution margin of close to 23%, whilst we — and that is growing at a rapid pace, while the O&M business, which has a contribution margin of close to 68%, is kind of flattish or growing at an inflationary growth rate.
So therefore, when you look at it on a consol basis, the gross margins will come down even despite us having a better COGS, which is resulting into higher contribution margin for the WTG business.
Arun
Okay. And then the other question was On actually like the recently last Sunday, if you see the spot prices on the electricity market had almost come down to zero, right? Because I think the minimum clearing price was around INR0.5 rupees per kilowatt. And this has kind of put the question on whether there is a green energy surplus risk that we all should be factoring in, which could probably lead to a further like curtailment on your renewable additions. So I wanted your thoughts on that and also like what is your expectations that you have built for capacity additions for the upcoming FA till for the next three to four years.
JP Chalasani
When you said that it has reached zero, obviously that’s right and in fact, it can even reach negative as we move ahead. But then you need to see that what point of time, you have a demand curve for 24 hours and 8, 760 hours in a year. What you’re seeing is surplus power on supply-side and less on the demand-side is a solar generating hours. That’s where we have the surplus, which is causing the prices to fall and also causing the frequency to go up, as I said, the earlier.
At the same time, when you see the tariffs on the exchange, during the wind generating lowers, it continues to be plus INR450 to INR5, okay, whereas the PPA tariffs at 3.6, 3.7, the exchange is still — at that point of time, the prices are 4.5 to INR5 and that demand during that particular part of time is continuing to grow. As I also said at the cost of presentation that the National load dispatch center has predicted that in the month of July and, the loss of load probability is as high as 40% for the evening hours, okay. And we are expecting a 25 to 30 gigawatt shortfall during the hour.
So therefore, the demand continues to be there and even if you see the overall electricity demand projections are anywhere between 6% to 7% continues to grow. But at what point of time. So that is the reason sometime back I said that it is a question of when do you want power and what point of time accordingly, your renewable energy mix will change okay. So that is what is important. The only question of looking at exchange, a minimum price doesn’t make any — any sense. We need to see at what point rate on the minimum is. It’s only — business solar generating ours, just the times price are going up.
Arun
Okay. Understood, understood. Sir, under the guidance the —
JP Chalasani
Yeah, second question is concerned that we compare to 2.1 gigawatts what we commissioned this year, we expect this to be a north of 6 gigawatts in this coming — in FY ’26 and touch about 7 to 8 gigawatts in FY ’27 and remain at that go to about 9 gigawatts thereafter. Looking at machinery, looking at the current way the project development pipeline is taking shape from various people as well as looking at the rid capacity, what is going to come up.
Arun
Okay. Okay. Thank you, sir. That’d be all from me. All the best for the upcoming quarters.
JP Chalasani
Thank you.
Operator
Thank you all participants, you are requested to limit your questions to two per participant as there are several people waiting for their turn. Thank you. The next question is from the line of Choudhary from JM Financial. Please go-ahead.
Rajendra Choudhary
Hi, sir, congratulations on a good set of numbers. Again, my question is something which had been previously as well as addressed to a certain extent by you. It’s regarding how would you compare solar plus wind to solar plus material in terms of cost, via? And also when you say that it depends on requirement, what mix would be used? But given the battery is a storage project, so would solar plus battery not really automatically for solar plus as well, like it can be used during wind generating other than in case it’s solar plus battery.
JP Chalasani
Let’s say the solar plus wind hybrid tariffs we all know is still running around 3.35 to 3.4 per kilowatt-hour. Hybrid. That’s a solar plus wind tariff. And solar plus the battery, the — only one beat has been seen in now declared, which was for the existing solar connected people, they said that we need power in the evening peak and the morning peak for two tours or so, which carries them to INR8 rupees, which I don’t think will move ahead. Simple thing to understand is that pure wind is 3.6 to 3.7. In fact, even if you look at our three bids which got awarded, which broken up and awarded in the first three months — in this financial year, this average is about 3.76. That’s the tariff of wind.
Solar is now, let’s say, around 2.55,000 to 2.60,000 domestic, 2.56 plus the battery cost. So unless the battery cost is less than INR125 per kilowatt-hour, solar plus can never replace wind as simple as that. So therefore, I don’t make an issue. But having said that, again, I want to say that it is not solar plus battery versus wind. It is all three combination depending upon what profile of generation you want if you meet your load curve at what point of time you want this. That is what we’ll decide whether — which combination of renewable energy capacity need to create at the battle.
Rajendra Choudhary
Sorry, just missed solar, the tariff.
JP Chalasani
Sorry, come again. But sir, I miss it more plus battery number solar plus that pure solar plus battery, one bit came up the — which is that they asked for which was open only for the existing solar connected people, developers where they can put additional solar capacity and put the battern supply in the evening peak, that tariff was somewhere around INR8 rupees.
Rajendra Choudhary
So obviously, I think it was some.
JP Chalasani
Yeah, yeah. But subsequently, battery prices are coming down. So even today, I don’t see the solar plus battery tariff can be anywhere less than 6.5 to 6.75 per kilow. So let’s wait-and-watch. But again, I said that it is not a comparison of that way. When you need power is what makes a difference. For example, now the CRC has come up with draft and then everybody has commented on opening up the connected — connected substation connectivity during non-solar hours where solar is already connected.
So when you do that, the wind can get connected. Obviously, wind also generates sometime daytime, but then you put some battery there in the daytime and then for the wind battery and then rest of the time fuel wind, that is very competitive, right? So therefore, there are so many new opportunities are coming up. And again, I say that this is not one versus other. It is exactly what combination you for the demand curve, what you I mistake.
Rajendra Choudhary
Thank you.
Operator
Sir, your voice is breaking up. Can you please ask your question again?
JP Chalasani
I mean, we can move on the next one.
Operator
Yeah thank you. The next question is from the line of Mayank from AMC. Please go-ahead.
Unidentified Participant
Great. Thanks for the opportunity. My question is related to the possibility of the import substitution when we talk about the manufacturing of the blades and national. So I mean, how do you foresee that in future and what all components currently you do import from outside India and we don’t import as well, okay.
Himanshu Mody
First of all, we don’t import. Our domestic component is anywhere 80% today. And even some of the imports we do is most of the supply security. But as I answered sometime back-in detail on this question, there is much more than the required capacity in India of various components. Therefore, I don’t see any issue in terms of you know that mandate what RLMM draft guidelines to say that all these four components to be manufactured in India, I don’t think — we personally don’t see any issue, not just for for a sector as a whole.
Rajendra Choudhary
So — and in that sense, I mean, what could possibly be a integration for us, if at all we think from next.
JP Chalasani
So today we do ourselves masses, we do ourselves the blade. So the — we procure the gearboxes and which is domestic. And then fourth component they put in later. We used to manufacture our
Sumit Kishore
In joint-venture, which is we sold. So therefore, we’re still buying from the same company. So at this stage, we’re not really looking at backward integration because for us at, nothing is changing by this import sitution. It is not changing for us as far as we are concerned. But then if your question is that because of this is coming in, is there a potential opportunity for us to do some more backward integration? Possibly the answer is yes, but it’s too early to talk about that.
Unidentified Participant
Yeah okay. Okay. And secondly, the R&D expenditure for this year, could you give the number?
JP Chalasani
So R&D expenditure has been close to about, I would say, INR150 crores historically. And going-forward, we may be increased — having an increased R&D expenditure. So I would say about INR225 crores would be the R&D expenditure estimated for this ’26, yes, 26.
Unidentified Participant
Okay. Thank you. Thank you.
Operator
The next question is from the line of Shiva from Pur Nartha Investment Advisors. Please go-ahead.
Shiva
Hello, am I audible?
JP Chalasani
Yeah, please go-ahead.
Operator
Yes, sir, the current participant has been disconnected. We will move on to the next question. It’s from the line of Sunil Jain. Please go-ahead.
Unidentified Participant
Yeah, thanks for taking my question. Sir, can you give viable interest-rate and depreciation both have increased fastly in this quarter and how it is likely to move.
Himanshu Mody
So firstly on the depreciation for Q4, it is at about INR93 crores as compared to INR66 crores in Q3 of the same financial year. Now the increase has been on two counts. One, of course, due to the Renorm acquisition, we have capitalized certain items, which over a period of five years we shall be providing for. And also there have been certain one-off small IT assets that we provided for. Going-forward, in terms of the depreciation forecast, I think it is safe to assume that with the increased capex for capacity expansion plus the Renom the intangible that we’ve created writing that of over five years.
It is safe to assume about INR350 crores to INR400 crores of annual depreciation costs going-forward. Far as interest cost has been — is concerned, again, we’ve started consolidating Renom, which has a small working capital, which is a cash credit debt of about INR120 crores. Additionally, we made a small borrowing in our subsidiary SE4 in Q4 of about INR100 crores, for which there have been certain one-time costs and the interest on that has been — it’s starting to get charged.
So as we use our increased working capital for enhanced deliveries plus these couple of items, the interest cost will go up. So if you look at our full-year interest cost this year has been about INR150 crores. We estimate that going-forward for FY ’26, this will be close to about INR250 crores.
Unidentified Participant
Okay, that was from my question. Thank you very much.
JP Chalasani
Thank you.
Operator
Thank you. The next question is from are you there?
Shiva
Yes am I audible? Yes, now you’re audible now. Okay sir, my question is in relation to SE Forge. Is it ready now to cater to forgings of 3.x megawatts for internal requirements and for external sales and wins? And are we going to see the acceleration in top-line in FE 4th in FY ’26, given that this did not happen in FY ’25 despite sharp increase in delivery?
JP Chalasani
So I think FY — Sumit, if you say while you are right on an overall year basis, not much of change compared to last year to this year. There is some growth. But if you see the quarter three and especially the quarter-four, you’re seeing that increasing trend now coming up. So we expect to maintain that momentum of quarter-four. And then obviously, we expect that this year would be different for ports will start getting into a CPL. And to answer your first question, yes, it can supply for our three megawatt of bios and it is also supplying — the new side. And we are also trying to be enlarged our capacity there to even meet the larger. But more importantly, we are now looking at the non-wind sectors within India. Plus there also significantly concentrating on exports as well.
Shiva
Sure. So because logically, I was thinking that if there is like 60% growth in delivery at the minimum, then some of that growth should get reflected in SE4s as well because there is a significant portion which is forces loan itself.
JP Chalasani
I agree. I think what will happen also is that at least the domestic manufacturing requirement comes in, so obviously, I think that also will — though castings are not put there or the bearings are not at put there. I think assuming that they’re all going to move-in that direction, so obviously the — that will benefit a SA asset to improve its capacity utilization factor. But not waiting for that. They are now looking at non-min in terms of, defense, et-cetera just looking at the export market.
Shiva
Got it. One question for Himanshu on capex, now that you are done with the 4.5 gigawatt of capacity related capex, IT capex. So are you still going to have more than INR4 billion of capex in ’26 or is it going to come off now.
JP Chalasani
As long as you don’t ask that when is the next model coming so no, Sumit, I think from a cash-flow perspective, we’ve incurred about INR350 crores of capex in FY ’25.
Himanshu Mody
Okay. And as we’ve guided earlier that it is safe to assume INR400 crores of capex year-on-year, a part of it is sustainance capex, but also a part of it is whether it is R&D, IT or capacity augmentation. So whilst we are working on fine-tuning some of our aggressive capex plans for this year, but certainly you can assume a base-case capex of close to about INR400 crores to INR450 crores also this year.
Shiva
Got it. And just on tax-rate for the full-year FY ’26, I know that there are moving parts, but what is the reasonable tax-rate to assume for the company or how should we think about tax-rate for FY ’26 and even FY ’27 where you a normal tax-rate.
JP Chalasani
So I think 25%, Sumit, is, I would say safe to assume. So as I explained on the call earlier, the DTA that we’ve created will start getting charged back into the P&L from Q1 of FY ’26 onwards itself. So when we speak again in July, you’ll probably see a charge of a charge-back of — or charge-off of the part of the DTA in Q1 itself. So you’ll start seeing a positive tax-rate as a percentage of PBT starting
Himanshu Mody
Q1 of FY ’26 itself. Yes, that will be a P&L charge, but not a cash outflow for the company.
Shiva
Yeah. Understood. Thank you and wish you all the best. Thank you.
Himanshu Mody
Thanks.
Operator
Thank you. Ladies and gentlemen, this was the last question for today’s conference call. I now hand the conference over to Mr Himanshu for closing comments.
Himanshu Mody
Okay. Thank you everyone for attending the call. Our Investor Relations team will be available for any further detailed queries that you may have. And we look-forward to interacting with most of you at either one-on-one or separate conference forums over the next few weeks. So thank you and all the best. Bye-bye.
Operator
Thank you. On behalf of Suzlon Energy Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you