Is Suzlon a turnaround story after FY16

Mehanzji:
Suzlon has given breakout , if we see last 5 year’s chart. In lst one year chart, it need to close above 19 for further gain. But short term chart is extremely bullish. Fundamental, i am losing confidence day by day in fundamentals. I am highly refined techniques for positional calls in future market. tremendous experience and refinement of technical skills. Need someone like you to talk and discuss on day to day basis. Thinking to form one new group. Need your support. Take some time. Would like to talk to you in person.
Yes, Suzlon is excellent buy. Accumulate on every decline. Worst is behind us.

3 Likes

I have high regards for your investment acumen…your positive outlook on the technicals is most welcome. The fundamentals are improving quite rapidly. The only thing remaining is change in investor sentiment…which i think will turn positive once the stock trades above 25…it may take 1-3 months for that to happen.

Meanwhile here is Emkay Global report which addresses investor concern about low tariff quoted by IPP in wind auction. In personal interaction, the IPPs have stated that they expect to make 14% incremental rate of return…

SUZLON_BUY_EMKAY_27.02.17.pdf (442.5 KB)

6 Likes

I was reading the Q3 conference call transcript of sanghvi movers…

They are saying that there is almost a panic booking of cranes by WTG makers…for next few quarters…

From this we can judge the bullishness of wind energy sector…if there is panic booking even for Q1 and Q2 which are supposed to be lean months…

The mngt of sanghvi movers in not talking of Q4 of fy 2017…which is anyhow a busy season…

They are referring to demand for next two quarters… Q1 and Q2 of fy 2018…there is so much of demand that just after completion of massive capex of 500 crores…sanghvi is going for another 300crores in next financial year…

Infact the first question of most of the analysts was… about demand from wind turbine sector…

If investing is about reading between the lines…then the writing cannot get more clearer than this…

After that, its only our prejudice against suzlon… thats holding us back.

5 Likes

Earlier i had invested in sugar sector…which showed a technical turnaround in Sept 2015…at that time nobody believed in turnaround in sugar cycle …for me the strongest signal was Nana Patekar telling Rajdeep Sardesai on TV in Oct 2015…that the drought in Maharashtra is so severe that there is no drinking water in villages even in Oct…so what will happen in summer.

For investors, the inference was…if there is no drinking water in oct 2015…there wont br any sowing of a water guzzling crop like sugarcane in Feb /march 2016.

Now i find a similar bullish signal in wind energy sector from the conference call of Sanghvi movers. If there is panic booking of cranes by wind enegy people in lean quarters…then obviously there is going to be a turnaround with huge volumes in wind energy sector.

Suzlon has an installed manufacturing capacity of 3500+ mw…current fiscal year its doing just 1650mw…and next year it may do around 2200-2400mw of wind energy…but that will be just 65% utilization of capacity…

As the capacity utilization level goes up, it will add disproportionately to suzlon eps…and also due to less capacity of its competitors, the marketshare of suzlon too goes up…and it leads to capcity utilization and eps going up…its a positive loop for suzlon, if things play out well in the future.

15 Likes

I have been invested in Suzlon since the past couple of years. Have been adding small chunks through major events like Dilip Shanghvi’s big time entry and the recent correction. Have been a very patient investor and am hoping that the turnaround is not too far. Mr Shanghvi holding of around 16.5% is reassuring and am sure his guidance is a big help.

1 Like

Astute thinking mehnaz!

Mehnaz Ma’am, can I request you to please share the concall link…also sanghvi movers is one of MOSL HNW entry at 265-270

Hi Mehnazfatima,

A question that arises here is that are you also studying the prospects of investing into Sanghvi Movers? Any view on technicals?

Sanghvi movers…technically very good…there is a turnaround in the last few days…its positive on both long term and short term charts

Dear Mehnazfatima,

Could I request you to share the chart and analysis on the Sanghvi Movers
forum…

Thanks

Dear Mehnaz,

Companies that won the auction bid recently held are:
Mytrah Energy (India) Ltd.,
Sembcorp Green Infra Wind Energy Ltd.,
Inox Wind Infrastructure Services Ltd.,
Ostro Kutch Wind Pvt. Ltd. and
Adani Green Energy Ltd.

The companies will set up their own wind power projects and sell energy to PTC India. These companies will have 25 years of power purchase pact with PTC india.

Wind power prices in recent biding has been crashed to a record low of Rs 3.46 a kWhr, with some vendors like Hero group have backed out, with their thought that such low teriff is not financially feasible.

How would Suzlon be effected by this bid activity and how will eps grow with low teriff?

DISCLOSURE AND CAUTIOON…for me big picture investing is as important as microscopic examination…perhaps, i go more by the big picture…

I like the picture thats developing in wind energy…

Those who dont like suzlon may consider buying inox wind which does not have high debt problem and is trading at less than 10 p/e…

Mine is more of a sectoral bet…

1 Like

hi folks,

There seems a lot of activity in this thread after a long gap. Thanks for rejuvenating the thread. There is a tailwind developing, being highly dependent on government regulations and subsidies, some concerns raised by mr tanti himself in an interview.

  1. GBI is expiring on 31st march 2017, (don’t know current status)
  2. GST if more than 0% GST levied on wind energy, it will become expensive compared to conventional resources.
  3. Wibd & Solar doesn’t have to pay Excise or Customs duty.

Tulsi Tanti in ET

The Ministry of New and Renewable Energy (MNRE) has announced the extension of the scheme for continuation of Generation Based Incentive (GBI) for Grid Interactive Wind Power Projects for the entire 12th plan period (2012-2017).

disc. invested

The twin incentives of GBI and accelerated depreciation are gone…and as per the conference call of the Inox wind, the demand will not be affected because of this. Now the demand is mainly coming from the wind auctions that are being conducted by the GOI…

1 Like

Why wouldnt the demand be affected without these incentives? The cost of setting up wind power is far higher than thermal or solar and hence the tariff will be higher. Also unlike solar, the trend in wind suggests that the capex costs are rising. Is there any reason why this would not hamper the demand?

3 Likes

Although the cost of wind or solar generation may come to the cost of coal or other fossil generation, we need to account cost of storage to the cost of generation as renewable supply is variable and seasonal and vary as per the geography.

Coal and other fossil sources work on the centralised grid model but with renewable the grid structure will be decentralized as there are multiple sources of wind and solar generation scattered at various places, some power generation will happen from home rooftops.Yes, there is a demand and there will be demand in the future but how the renewable industry will maintain the competitiveness once govt subsidies are taken off is a serious proposition. There is already debate going in US by Coal lobby to abolish subsidies to the renewable sector. So, there could be a political role as well as there are still abundant fossil fuels to be consumed and lot of jobs attached to the sector. You will get growth and Topline in renewables but margins and profitability is subject to many known and unknown probabilities

Cheers,
Amit

1 Like

I am posting a few important points brought to my notice in a private message by a more experienced investor in Suzlon… Though the inferences drwan in the later part of this post are mine.

Your growth plans?

Over the next five years, India will deliver 60 GW of wind capacity from 28 GW. So another 32-34 GW addition will happen. So we are hoping to build capacity worth 15 GW over the next 5 years – 11 GW in wind and 4 GW in solar. But we are not growing solar on a standalone basis. We have developed an integrated system design – wind and solar hybrid. Because of that we are increasing the plant load factor (PLF). Wind is giving 25 percent because of old technology but we have developed new technology which is giving a 35 percent PLF. Solar is giving 18 percent with the old system but we have gone to 25 percent, and we are blending both the energy sources in a common infrastructure to bring 40 percent PLF to 50 percent PLF, depending on the state. So that will give utility scale projects and it’s equal to the standalone projects which is equal to the conventional power plant solutions. Over the next five years, we also aim to reduce the cost of energy by 20-25 percent from today’s level

THE ABOVE IS FROM THE INTERVIEW OF TULSI TANTI @DAVOS

nobody else doing both wind and solar…they are either wind or solar…not both…

Only suzlon left in the field…and that too with a huge increase in PLF…not to speak of savings in power excavation

No other player…Gamesa…can match the hybrid thing of suzlon

This is perfectly aligned with govt hybrid policy…and suzlon has a huge first mover advantage too…

Is that why suzlon is not aggressively lowering its prices?

IPP can use the same site for solar power bidding too…and combine both the technologies for 40-50% plf…

So whoever goes with suzlon now, benefits in solar too…at a later stage…

And once its hybrid…its as cheap as conventional energy…

So why would anybody now go fir conventional…huge time… environmental cost…coal linkage issue… land acquisition issue…

Every problem solved in hybrid…

BUT FOR THAT YOU FIRST HAVE TO COME TO SUZLON…you wont get it anywhere else…

1 Like

Transcript of a whatsapp conversation between two Suzlon bulls…

At PLF of 45-50% Suzlon gets into direct competition with Coal based Power Plants

Becos even if a Coal Fired Plant has 100% PLF…
There are costs of running it

So effectively a producer wont earn more than 30-40% NPM

And if a Renewable Source gives 45-50%…

Becos even if a Coal Fired Plant has 100% PLF…
There are costs of running it

Whereas a Renewable Power plant has no Costs of Running… Apart from 1-2% OMC cost

So on a Net Basis both give same yeild

But there is an Environmental cost of running a Coal Fired Plant

Ofcourse ppl will Opt for RE

See there is a 35-40% cost of running a Coal fired plant

Fuel and Employee costs

So if Hybrid model gets going

Coal ki Chhutti

All I can say is

We have nothing to loose from here

we are almost witnessing a revolution…

Lets hope it pans out as we are envisaging it to be…

It all starts with a dream…

And Tulsi tanti and Dilip Sanghvi…can DREAM BIG👍

Yup
Kuch acha to kar hi lenge…

Problem with Suzlon is management and debt and Tanti is not going to change on debt part at least. He will chase inorganic growth and will pile up more debt.

2 Likes