Being the bad phase should be over. And with such a huge order book, can we expect this financial year FY19, it would get its old value back? IS it a good buy at this level?
The working capital is negative from the B/S …and look at the A/R its around 35% of total sales which means a majority of its customers may not pay upfront …how they plan to survive ?
Orders are recognized by Suzlon on after signing of PPA by the Independent power producer and on receipt of advances from the customer.
Almost all the customers in this case are major corporates and the project is fully financed by banks and financial institutions. Payment is made on completion of specific milestones by suzlon. After execution, Suzlon has the annual maintenance contract for 100% of it’s wind turbines…
Upfornt payments are not made and high working capital is an issue
A very very informative video regarding the current situation in wind sector .
By stalwart advisors
1 Like
wind - cumulative installation is only 32 GW and 28 GW more for the target and that too in four years… isnt it music to suzlon’s ears ??
Two resolutions for fund rising (equity dilutions) not passed-rejected by public shareholders in recent AGM.
4 Likes
Q-1 Losses at 609 Cr. Operation Guidance for FY-19 withdrawn. Seems whole FY-19 is going to be in Loss only.
1 Like
They don’t have any more assets to sell to reduce debt and equity dilution was shot down by the shareholders. Won’t be surprised if replacing old debt with new debt is considered debt reduction by Suzlon management.
4 Likes
Understand from someone working at Suzlon that they (IPP) are having continued delays in commissioning and hence obtaining payments for one of their completed project in TN since over 1 year. As last tranche of payments is tied to commissioning and this could be ~40% of total, liquidity situation is pretty tough.
This is hearsay info and I haven’t verified with other sources.
I was considering entering this scrip for the 3rd time after booking losses twice in past 7 years. But will wait for next quarter results to re-evaluate.
1 Like
They cannot pay the debt and trying to borrow???
Suzlon has commissioned SECI-1, 250 MW order.
Hi @ayushmit and @Mehnazfatima, are you guys still tracking Suzlon. If so, any thoughts on the future?
Price seems to be moing sideways off late hovering around 5.8 - 6.2, also witnessing strong volumes 50-60L each day since past 2 weeks or so.
Dic: Invested from higher levels.
Hi Sridhar,
I do track but its hard to understand whats happening. Some articles point towards delays etc from the government institutions…while some articles keep painting rosy picture and keep giving big targets for wind installation for next year and so on.
This has been a bad investment from my side and a mistake. Due to the very high debt, I can’t figure out how the company will return to decent profitability…even if they achieve the numbers they are projecting.
Regards,
Ayush
5 Likes
Wind does not have a great future with better avenues available in renewable space. It is high capital intensive space with low ROI.
Solar and battery storage cost coming down sharply.
1 Like
For me, Suzlon gave the final exit signal on quarterly close below 10.20…i have listened to the market, accepted my mistake and sold off all the qty…
The problem is with regards to power ecacuation infrastructure…till the sub station is built is Gujarat and TN, installation of Seci 1,2,3,4 cannot happen fully. So wind power is a story that may playout fully in 2020/2021…
I am still following this sector …but not invested in it
2 Likes
Hello Ayush,
You might find this podcast with Hero Future Energy’s CEO Sunil Jain interesting/insightful.
Main points discussed:
- India’s first solar-wind hybrid project. Better utilization of evacuation infrastructure and better economics.
- Some issues faced were related to turbine shadow decreasing the solar panel output.
- Urges for policy support for Energy Storage to avoid Solar cell situation (which is import based)
- Subsidy on RE Tariffs v/s Thermal power (social and environmental cost of water usage)
- Whether Govt can meet its RE target by 2022? Says given the time needed for commission of projects, he expects the last window for Wind Tenders is Mar 2020, while for Solar it is Dec 2020. 30 GW of Wind tendered so far is substantial and can make up 100 GW of combined renewable addition. Solar target will be difficult due to rooftop’s 40% share.
- Doesn’t believe the RE policy will be affected even if govt changes since it is not in their best interest to increase the cost of power from INR 2.5
- Elasticity of Electricity demand: Previous relation between Electricity Demand and GDP Growth of 1:1 has fallen drastically since Dec 2017. One of the reasons is increased use of efficient devices such as LED’s. Also UDAY where DISCOM’s have been reducing losses due to theft artificially lowers the demand numbers.
4 Likes
HI Ayush and Mehnaz, thanks for your reply.
I I too followed the wind energy story and broader RE story closely for past 2.5years and it has been a roller coaste ride. Have been invested in stocks like Swelect Energy, Inox Wind and Suzlon over these years and had a mixed experiences in each of these.
It is sad to an extent that bad policy making almost killed the turn around for some of these firms. Hoping to make a buck sometime else in this space.
Regards,
Sridhar
1 Like
What is the impact on Suzlon after today’s SC verdict?
I think it is a positive step for investors in power sector especially for suzlon’s turnaround.