SUZLON - SUZLON ENERGY LTD. Share Price

Suzlon's management expressed a highly positive outlook, emphasizing strong growth momentum driven by strategic initiatives and a robust order book. Key highlights include:

Order Book & Market Position:

• Order book at an all-time high of 5.5+ GW (92% S144 turbines), ensuring revenue visibility for FY26 and FY27.
• Leadership in C&I (58% of orders) and entry into PSU segments (e.g., NTPC, Torrent Power).

Operational & Financial Performance:

• Capacity expansion to 4.5 GW with new blade lines in MP/Rajasthan and revamped facilities.
• Record quarterly delivery of 447 MW (+163% YoY); FY25 deliveries already surpassed FY24's 710 MW.
• Q3 revenue at Rs.2,969 Cr (+91% YoY), EBITDA Rs.500 Cr (+102% YoY), and PAT Rs.388 Cr (+91% YoY). Margins improved due to scale benefits.
• Net cash position strengthened to Rs.1,107 Cr (vs. debt in subsidiaries).

Industry & Challenges:

• Industry commissioning lagged at 2,277 MW (9M FY25) due to land/transmission delays. Suzlon has 450 MW commissioned/pre-commissioned.
• Focus on resolving execution bottlenecks (land availability, customer collaboration).

Future Strategy:

• Targeting multi-decade growth in India's wind sector (400 GW target by 2047).
• Expanding Renom's OMS portfolio (AUM crossed 3 GW) and advancing ESG goals (UN Global Compact, net-zero by 2050).
• Evaluating export opportunities and larger turbine development while maintaining pricing discipline.

Guidance:

• Steady 20%+ contribution margin (WTG segment) and capacity utilization ramp-up. No immediate tax liabilities; FY26 focus on execution scalability.

Overall, Suzlon is confident in sustaining momentum, backed by operational readiness, financial strength, and India's renewable energy push.

Question 1:
Mohit Kumar (ICICI Securities): "How has been the order inflow inquiry as of now, are we seeing inquiry as strong as it has been there in the last 18 months?"
Answer: Order inquiries are increasing quarterly, with traction across C&I, PSU, and bid segments. Discussions now include longer-term pipeline projects (beyond FY26), reflecting strong confidence in Suzlon's capabilities.

Question 2:
Mohit Kumar (ICICI Securities): "Given transmission charges are set to rise by June 2025, are we seeing C&I momentum picking up in Q4 FY25/Q1 FY26?"
Answer: C&I demand remains robust despite reduced transmission charge waivers (75% post-June 2025 vs. 100% earlier). Tariff arbitrage and partial waivers continue driving interest.

Question 3:
Mohit Kumar (ICICI Securities): "Why are O&M revenues rising while EBIT remains flat?"
Answer: O&M EBIT fluctuations stem from one-offs like insurance claims or VAP/VAS sales. Margins are expected to stabilize at ~40% EBITDA long-term, despite short-term variances.

Question 4:
Sumit Kishore (Axis Capital): "What are emerging trends in wind-solar sizing for FDRE projects given evolving battery economics?"
Answer: Wind capacity in FDRE projects remains critical (100%+ of bid capacity) due to load profiles. Exact ratios (e.g., 150"“170%) depend on regional demand and storage costs.

Question 5:
Sumit Kishore (Axis Capital): "Can you quantify non-recurring items in Q3 expenses and clarify recurring depreciation/interest costs?"
Answer: ESOP charges (Rs.32 crore in Q3, Rs.116 crore annually) and Renom consolidation impacted expenses. Depreciation (~Rs.60"“65 crore/quarter) will persist due to capacity expansion.

Question 6:
Sumit Kishore (Axis Capital): "What steps are being taken to diversify beyond WTG?"
Answer: Focus includes expanding advanced project development (1.1 GW underway), multi-brand O&M via Renom (AUM >3 GW), and exploring exports. No immediate plans for non-wind diversification.

Question 7:
Puneet Gulati (HSBC): "How should we interpret the 5.5 GW order book timeline?"
Answer: Most orders are slated for FY26"“FY27 execution. Suzlon enters FY26 with full-year order visibility for the first time, ensuring revenue predictability.

Question 8:
Puneet Gulati (HSBC): "Are orders priced flexibly given execution delays?"
Answer: Contracts include steel price pass-through and validity periods. Delays trigger renegotiations, but Suzlon's supplier agreements mitigate cost risks.

Question 9:
Vikram Datwani (Nuvana): "Will Suzlon prioritize order quality given 24-month visibility?"
Answer: Suzlon prioritizes projects with land/evacuation readiness and strong counterparties. Delivery schedules may adjust due to client delays, but no outright order rejection occurs.

Question 10:
Amit Bhinde (Morgan Stanley): "Are WTG realizations (Rs.5.2 crore/MW) facing pricing pressure?"
Answer: No pricing pressure; higher realizations reflect delayed EPC execution. Steady-state realizations are ~Rs.5.8 crore/MW. Margins (20%) remain sustainable with steel pass-through.

Question 11:
Aadesh Mehta (Motilal Oswal): "How sustainable are contribution margins (~20%)?"
Answer: Margins may dip slightly as EPC execution resumes but will stabilize near 20% due to scale, supplier leverage, and operational efficiency.

Question 12:
Dheeraj Kripalani (Avendus): "What is the wind capacity addition outlook for India?"
Answer: FY25 installations likely at 3.5"“4 GW, rising to 6 GW in FY26 and 7"“8 GW by FY27, driven by improved land/evacuation readiness and policy tailwinds.

Question 13:
Jinesh Shah (SK Investment): "How does capacity ramp-up impact depreciation?"
Answer: Depreciation (~Rs.65 crore/quarter) reflects expanded capacity (4.5 GW). Annual capex (Rs.350"“400 crore) will sustain this trend, with Renom adding Rs.8 crore/quarter.

Question 14:
Satpal Singh Khanuja (Ishaan): "Could US policy changes (e.g., IRA) impact Indian renewables?"
Answer: Minimal direct impact. Potential upside if US uncertainty diverts investments to India. Suzlon sees no near-term threat from Chinese/European dumping.

Question 15:
Depesh Kashyap (Invesco): "When will normal taxation apply, and how will cash be utilized?"
Answer: Tax benefits likely persist through FY26. Cash use prioritizes growth (organic/inorganic) and shareholder returns post-reserve reclassification (expected mid-2025).