Suzlon Energy Limited is a wind turbine supplier with its headquarters in Pune, India. The company is one of the world’s leading wind turbine manufacturers.
Suzlon Energy’s market capitalisation as of July 31, 2018 is just over Rs.4,128 crore.
Company’s Wealth and Recent Performance
- For FY18, Suzlon gained closed to 35% of market share, making it the third year in the row that the company has captured a significant share of the market. This was an improvement on the company’s performance in the previous quarter, where it continued to suffer losses due to outstanding debts.
- The company’s revenue was listed at Rs.8,292 crore for the financial year ending March 31, 2018. Its performance in the last quarter of the year was Rs.2,236 crore before tax.
- In spite of the market share gain, Suzlon posted a net loss of Rs.470 crore for the fourth quarter ending March 31, 2018, as order volume troubles and delivery continued to plague the company. The company’s balance sheet continued to reflect a loss on its books of Rs.384 crore for FY18.
- The company’s EBIT before forex was listed at Rs.807 crore with an EBIT margin at 9.7% for FY218. Its EBIT margin for the fourth quarter ending March 31, 2018 was a mere Rs.218 crore, with an EBIT margin at a static 9.7%.
- The consolidated debt as listed on the company’s balance sheet stood at Rs.6,037 crore for the year ending March 31, 2018, with a working capital debt of Rs.3,889 crore. This is an improvement on the previous year’s performance.
Company Stock Trends in 2018
- On January 2, 2018, Suzlon Energy’s shares traded at Rs.15.85, with the scrip showing a slight rise in value from the middle of December 2017. Better than expected third quarter results coupled with delivery of existing orders helped push up the value of the stock. However, markets trends in the renewable energy sector were on the decline, with Suzlon’s share price also falling to Rs.14.60 on January 31, 2018.
- In February, the company opened trading for the month at Rs.14.60, remaining unchanged on a flat market before plunging to Rs.12.80 on 6 February. A shift in legislation towards renewables and narrowing operating margins ate into company performance projections, as investors looked to more stable stocks. There was no change in price as the month ended.
- March saw a marginal rise in the value of the stock, which traded at Rs.12.75 on March 1, 2018. A bullish equity market and a wave of positive investor sentiment sent stock prices in general on a climb. Sharp dips in the share price were recorded as the month ended, as the company’s stock fell to Rs.10.70 on March 30, 2018.
- Suzlon opened the month of April trading at Rs.11.10 on a persistently bearish market for non-conventional energy companies. Overseas trends and legislation in favour of fossil fuels affected orders and supply overseas, which dented the company’s bottom line and reflected poorly on its stock performance. The month ended with the stock falling marginally to trade at Rs.10.90 on April 30, 2018.
- The month of May saw Suzlon’s stock open at the same price it closed at in April, but fluctuations in stock value were quite pronounced. Uncertainty on the global market and a move towards higher taxes on raw materials put pressure on the company’s performance. The drop in value continued into the month as May ended with the stock priced at Rs.8.75.
- The downward slide was not quelled into June, as the company’s stock opened at Rs.8.40 on June 1, 2018. The falling rupee and trade war fears rattled markets across the world, with the steel and aluminium tariffs imposed on India severely impacting the company’s projected profit margins. The stock ended the month at Rs.7.90.
- July saw a further drop in the stock’s value as it opened at Rs.7.35 in spite of a revival in market confidence. Suzlon stocks were more or less static over the course of the month, ending at Rs.8.00.
Company Stock Trends in 2016 and 2017
- 2016 opened with Suzlon’s shares trading at Rs.22.75, as the company’s delivery system continued to be plagued by delays which affected investor confidence in the company and negatively impacted its stock price. The stock was on a downward spiral for most of the month and the next, falling to as low as Rs.13.20 on February 23, 2016 due to increased sell-offs on the bourses, as investors looked to cut their losses before a steeper drop in share price.
- There was a slight improvement in March and April, though the stock traded mostly flat on a static equity market and minimum overseas upheaval in terms of the renewable energy sector. The stock opened at Rs.13.45 in March and rose to Rs.14.15 on April 1 on steady and consistent trading.
- May also did not see much in the way of movement in the share price, with the stock opening at Rs.15.60 before rising to Rs.16.15 by the end of the month, bolstered by better revenue figures. June also saw the stock price rise, as it traded at Rs.15.50 on June 1 before rising to Rs.17.10 on strengthening investor confidence in the company.
- July and August saw fortunes turn as Suzlon stocks once again nose-dived on operating troubles and losses at some of its manufacturing plants. July had a share price high of Rs.18.75 on 12 July after opening at Rs.17.30. However, there was a downward trend for the rest of the month as markets tanked on a rising dollar rate.
- There was marked fluctuation in the stock price for the last four months of the calendar year, as Suzlon’s stock price fell to Rs.15.40 on 28 September after suffering a sharp fall over the course of the month. October did not see much change, with the average price being Rs.14. December saw the stock trade at Rs.14.80 before falling to Rs.13.65 as the year ended on 30 December.
- 2017 saw some positive trading for the stock with the year opening at Rs.14.05 on January 2, 2017. Prices were on the rise in spite of turbulence across markets, as the company’s quarterly results were expected to reflect a rise in revenue. February and March also sae a continued rise, with the stock reaching Rs.18.05 on 13 February before plateauing for a while on static trading.
- The year end results and projections led to some troughs in the stock price over the month, as March opened at Rs.17.55 before closing at Rs.19.45 on positive investor sentiment.
- Stock prices continued to enjoy a bull run as the new financial year began, with the company’s projected earnings and targets seen as achievable while making a dent in its debt consolidation plan. April opened at Rs.19.20 before prices rose to Rs.21.25 in May on a favourable market run for the company.
- June saw a drop in value again, as Suzlon fell to Rs.18.95 on 15 June as investor expectations and a change in market trends affected the company’s stock. July also saw a drop in stock value but news of a new plant being opened and on-track delivery pushed prices up to Rs.18.90 on 14 July. The rise was short-lived, however, as the stock plunged towards the end of the month.
- The latter half of the year saw renewed dips in the stock price due to fluctuating fortunes and raw material cost. Higher import costs sharply affected the bottom line as shareholders and investors revised revenue projections downwards on continued poor performance. Stock prices ended the year at Rs.15.55 on December 29, 2017.
Should You Invest in Suzlon Energy?
- While the company has been on a downward spiral in terms of delivery and rising debt due to higher operating costs, Suzlon shares are still sought after due to their potential and the growing renewable energy sector.
- Since the company’s major buyers are mostly overseas, it has to abide by and adapt to different country’s laws and rules regarding operating and specifications. With a shift towards fossil fuel revival in the United States and measures meant to boost conventional energy, the company saw a dip in value estimation.
- Being a pioneer in the field of renewable energy in the country, Suzlon is poised to capture the market by being one of the few trusted players. Investors are gradually looking at renewable energy as a viable and profitable sector, with government legislation also favouring sops and benefits for such companies.
- The company is also tackling its high operating debt ratio and taking steps towards prompt delivery of services and goods, after a period marked by delays and inefficient service.
- While the stock has tumbled in recent times, it is a viable long-term investment that could pay rich dividends when it creates a larger presence domestically.
Suzlon Energy Limited is a wind turbine manufacturing company that was set up in Pune, India. The company manufactures wind turbines and generators, providing end-to-end solutions for renewable energy projects. Suzlon has an international presence, having installed wind turbines and allied technology in over 18 countries. Suzlon also delivers turnkey projects and provides maintenance and support. The company has offices in India, Germany, The Netherlands as well as Denmark, while it has manufacturing plants that operate in India and China.
History of the Company
Suzlon Energy Limited was set up in the year 1995 by Tulsi Tanti with the aim of providing a reliable and environment-friendly electricity supply to customers. Suzlon collaborated with a German wind energy supplier and soon manufactured wind turbine generators, which were set up in Gujarat, Maharashtra and Tamil Nadu. The company also expanded internationally, setting up offices in China and Australia by 2005. They were listed on the Bombay Stock Exchange (BSE) in 2006 and was among the leading renewable energy companies globally.
Management of the Company
Mr. Tulsi Tanti- Chairman and Managing Director
The founder of Suzlon Energy, Mr. Tanti moved from the textile business to renewable energy when he set up the company. He also serves as the Chairman of Suzlon Wind Energy Corporation, a subsidiary of Suzlon Energy Limited. He serves on the boards of various renewable energy associations both domestically as well as overseas. Considered a pioneer in the renewable energy industry in India, he continues to serve as the chief promoter of the company.
Mr. J.P. Chalasani- Group Chief Operating Officer (CEO)
Mr. Chalasani joined Suzlon in 2016 as the CEO of the group company. He has served in various capacities at several leading conglomerates, beginning as an engineer with NTPC. After almost two decades at NTPC, he was associated with Reliance Power, serving as the CEO and expanding the brand’s presence across the country. He took up a new challenge at Punj Lloyd, where he served as the Managing Director and Group CEO. Mr. Chalasani has received numerous accolades over the course of his illustrious career and enjoys sport in his free time.
Suzlon Energy Limited Listings in BSE, NSE and Indices
Suzlon Energy Limited shares can be traded on the Bombay Stock Exchange (BSE) as well as on the National Stock Exchange (NSE). The company trading codes for the bourses are mentioned below:
- BSE: 532667
- NSE: SUZLON
- ISIN: INE040H01021
Suzlon Energy Ltd
5 Shrimali Society,
Ahmedabad 380009, India.
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.
The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.