Suzlon posts fantastic Q4

about 2 months ago
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Unlike what majority of the media has painted, Suzlon Energy has actually posted very good numbers for Q4FY24. As explained in our Big Gems section today, it has been explained by most what YoY, it has reported a 9% drop in net profit at Rs.254 crore but what they fail to mention is that in previous fiscal, the company had an exceptional one-time gain on asset de-recognition of Rs. 252 crore.

If we look at the number in this background, the earnings are fantastic. Its wind turbine generator (WTG) volumes rose 50% YoY and 61% QoQ to 273 MW while capacity under operations and maintenance (O&M) also rose 6% YoY and 1% QoQ to 14.7 MW. O&M business operates on very string margins of 39%, with WTG segmental margin also improving in Q4FY24 to 4%, from 2% QoQ and -1.5% YoY. This led to a 29% (YoY) and 40% (QoQ) rise in consolidated revenue at Rs.2,179 cr, with PBT before exceptional items tripling YoY to Rs. 280 cr, from Rs. 72 cr in Q4FY23 and up 38% QoQ from Rs. 203 cr in Q3FY24. EPS for Q4FY24 stood at 19 paise, with FY24 EPS at 50 paise. Outstanding order book, as of date, stands at highest-ever 3.33 GW, up 46% since Dec 2023.

Driven by some biased and wrong opinions, the stock is in the red today; from its close of Rs.45.89, the stock opened lower at Rs.45.20 and went down to Rs.45 and is currently quoted at around the same levels.

As explained by our Editor, Mr.SP Tulsian, Suzlon is India’s largest renewable energy (RE) OEM company, with 32% market share. RE is among the top themes in the market now, and rightly so, given the massive opportunity. Peer Inox Wind has much higher debt and operates on lower margin. Hence, Suzlon is our most promising play in Renewable Energy, backed by healthy financials (debt free, positive PAT, rising order book), large cap status and high growth visibility, atleast for the next 5 years. Informed circles are also speculating company to be going into the fold of Adani Group soon, which will be a big kicker for the stock price to rise. Also, this progressive Govt, once back in power, will bring in many more positives for the sector, like import ban from China of machinery and equipment etc.

54.63 (-0.05)

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