Suzlon Q4 Results: Profitability with a net profit of ₹320 crore
Suzlon Energy was once considered the pioneer in alternate energy and its chairman, Tulsi Tanti, had pioneered the concept to India long before it became a national economic goal. However, over time, weak demand and excess debt pushed the company into deep losses, before the Sun Pharma founder, Dilip Sanghvi, entered the company as an investors in his personal capacity. After a long gap, the company has turned back into the black. In fact, for the quarter ended March 2023, Suzlon Energy posted a consolidated net profit of ₹320 crore. In contrast, Suzlon Energy had posted a consolidated net loss of ₹205.52 crore in the year-ago period i.e., for the quarter ended March 2022. For FY23 fiscal year overall, Suzlon reported net profits of ₹2,852 crore on a consolidated basis, compared to a net loss of ₹258 crore in FY22. So, the turnaround is for real.
How did Suzlon perform on the top line? For the March 2023 quarter, total revenues of Suzlon Energy came in 31% lower at ₹1,700 crore compared to top line revenues of ₹2,478 crore in the year-ago period. For the full fiscal year FY23, total revenues were lower by 9% at ₹5,990 crore. However, the traction is likely to build up from here. For instance, as per a statement by the vice chairman of the company, Girish Tanti, the strong financial performance also coincided with the launch of the all-powerful 3 MW technology platform. The company believes that the platform would be a value accretive model for the company. In fact, the positive feature was that the net worth of the company had turned positive at ₹1,099 crores and this was happening after more than 10 years. So, what has been the turnaround strategy.
Suzlon adopted a very conscious strategy of cutting down on debt in the books as that was hampering the turnaround the most. The rights issue done by the company has been largely instrumental in helping the company cut down on its debt. This also allowed them to refinance some of their loans at much lower rates of interest. The CEO of Suzlon is Mr JP Chalasani, who does not need any introduction in power circles. He was formerly with blue chip companies like NTPC, Reliance and Punj Lloyd. In early 2023, JP Chalasani replaced Aswani Kumar at the helm of Suzlon Energy.
According to JP Chalasani, FY23 had demonstrated consolidation for Suzlon. They had managed to address most of the challenges comprehensively in the last three years and FY23 was a year where the results were out in the open. In fact, as part of the conscious strategy, Suzlon Energy had reduced its debt by more than 90% in the last three years to address the skew in the capital structure. They had also responded to the market requirement of a larger wind turbine through our S144–3 MW series technology platform.
Even the order book of Suzlon now looks quite impressive. For instance, the company has cumulative orders of 1,542 MW which is the highest level achieved since 2019. This includes the order book as on March 31st, 2023, of 652 MW plus orders secured subsequently to the tune of 890 MW. The impact of all these numbers was felt on the stock price, which gained around 3% to close at ₹10.67 per share. It is long way off its old peaks, but the turnaround appears to have started in right earnest.
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