A very positive research report by KR ChoKRChoksey_IC_Suzlon_20170405.pdf (1.2 MB)
ksey
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Considering Suzlon is a turnaround candidate, targets assigned by most analysts are fairly cautious. Besides debt situation is not that bad now as has been the case maybe two years back. Management has already signaled dilution of subsidiaries. FCF from operations is going to improve as the industry tailwinds continue. GBIs, hybrid policy delay and pricing mechanism remain a few industry level risks. Suzlonâs large equity base can be a deterrent in high targets but I donât see why it cannot grow 4-5 times from its current base in next 3-5 years. What would be your target price for next 3-5 years?
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Low prices quoted in competitive bidding poses a challenge to WTG makers. For the IPPs to make a return of around 15%, it is most essential that the PLF of the wind turbine be above 35%. So far only the model S111 120m model with hybrid tower gives a PLF if around 35% for non high wind sites and 40% for high wind sites. Thus in this aspect, Suzlon is at an advantage over itâs competitors.
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Suzlon chief expects strong growth momentum for renewable energy - http://www.thehindubusinessline.com/companies/suzlon-chief-expects-strong-growth-momentum-for-renewable-energy/article9617361.ece
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Can any of the seniors tell me, why did SUzlon fall from market price 424, to current market price 17!!
I am new in share market, hence asking this basic question.
Debt, Naam to Suna hoga 
They had done expansion and took lot of debt anticipating growth and demand in global markets. The tide turned in 2008 and demand suddenly vanished. They could not generate cashflows to pay their debts. So they had to sell assets and still covering up on debt. They issued huge equity to service their debt. So, it came down to 17. It came down in single digits as well in the past. I hope it answers your curiosity. All the best in your investing journey.
Cheers,
Amit
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During financial year 2017, solar capacity addition stood at 6.8GW⌠This is 26% higher than wind addition of 5.4GW,
Solar is more cost attractive and in demand than wind alone.
Agree, The issue is that PLF for Solar is around 18%, sequentially falling bidding prices is anotherâŚGeographically india is suited for solar while europe is suited for windâŚSuzlon is a theme based play availale at attractive valuations however have to be careful to not invest in one go
Interesting read here https://capitalmind.in/2017/04/outlier-in-focus-suzlon-a-new-wind-blows/
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I follow this thread with great interest. Was just reading something that made me remember Suzlon. Sharing it⌠it probably meets the test of Chandrakant Sampat 
One of the worldâs best value investors.
âPick up good companies with good managements when their share prices are at an eight-year or 10-year low."
Full article at: Chandrakant Sampat: Bio, Investments, Articles, Quotes - Resource Page
You guys can comment if it meets the test. It might make me an interested investor.
Best.
Disc - Not invested.
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First of all a good article about an investor I knew nothing about. I agree on both counts. Suzlon has a good management and it is still near about its all-time low. But considering other parameters like zero/low debt, easy comprehension of business and low capital expenditure, Suzlon would not fit very well, primarily because of the debt. But youâll have to understand that debt is the cause behind Suzlonâs all-time low price. And the day it reduces debt substantially or goes debtless, it wonât be a low priced share anymore. And there is a good chance of it happening in the next few years.
Three reasons why investors are hopeful are: 1) it already has reduced debt to half and the remaining is more manageable, 2) renewables industry has revived after a dull period and is expected to grow well for next few years, 3) Suzlon is a leader and an excellent low cost innovator with a global presence (A strong competitive advantage).
At the same time there are three reasons why investors are skeptical: 1) Suzlon has lost the investor confidence and it would take time and consistency in performance to rebuild trust again, 2)There are better risk-return trade-offs available currently which makes Suzlon a less preferred option at the moment. 3) there are still gray areas in the industry like pricing, GST etc which may have an impact
That leaves you with three options â 1) Invest now if you are already convinced with the Suzlon turnaround story, 2) Invest after the stock crosses 21, which is a major resistance, 3) wait for the stock to correct to 13-14 levels for buying if you wish to try your luck (cos it seems highly unlikely)âŚDo let us know what you decide. Good luck!
Disc: Invested
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Very well articulated. Thank you for the pointers. I will keep you posted if and when I take a position. Much appreciated. Best.
Interesting read - maybe a glimpse into the solar energy powered future (10+ years) for India?
Solar power tariff falls to record low of Rs3.15 a unit
(Solar power tariff discovered through auctions hit a new low of Rs3.15 per unit with NTPCâs 250MW project at Kadapa in Andhra Pradesh)
Airborne Wind Tech
Interesting Concept Video - Autonomous wind energy drones
Lithium-ion batteries have taken the lionâs share of the energy storage market, but technology advances to flow batteries that bring down costs and improve their safety and environmental profile are likely to boost installations.
Modi govt plans to auction 4 gigawatts of wind energy in FY 2017-18
(Modi government plans to auction 4 gigawatts of wind capacity in fiscal year 2017-2018 in addition to 750 megawatts of solar capacity it will tender next month)
Solar power may become cheaper than coal in India
(Solar power tariff may fall below Rs3 per unit after the SECI auction of solar power projects at Bhadla, Rajasthan)
Suzlon has formed an interesting evening star which for those who believe in candlesticks is an early indication of trend reversal. It gains further importance as it has formed near its 2 mth old trendline. Investors in Suzlon may want to wait for a bit because the prices may turn around to test the support formed by the previous top formed in July 16 at 19 odd levels. If that holds then Suzlon will become a real story. But if it breaks then i would be worried. It is also pertinent to note that evening stars occur infrequently making them important in the candlestick approach
Disc - not invested but interested from a trading perspective.
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The article is worth reading
My view is, the author has covered the topic very nicely and I believe without seeing economic merits, the way Indians are going about building excess capacity, there is a high probability, things will turn sour.
Also, comparing Solar power and thermal by not excluding subsidies govt is inherently flawed and not sustainable over the long term.
Please share your views,
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