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Suzlon Energy - Research Report

Suzlon Energy - Research Report

 

Suzlon Energy LTD is among the world's leading renewable energy solutions provider with Presence in 17 countries across Asia, Australia, Europe, Africa, and the Americas. Suzlon is powering a greener tomorrow with its strong competencies in renewable energy systems. India is 4th Largest Wind Market in the world and government targets 100GW installed wind energy by 2030, 94GW wind infrastructure by 2027 and 26+ GW installations in next 5 years. To provide boost to this target’s government has also planned to announce 10GW exclusive wind tenders per annum and currently the India’s wind pipeline stands at 13GW as on June 2023. Being in line with the ambitions of Government of India Suzlon is delivering its best-in-class contributions in Wind energy segment with 20.3 GW Globally installed Wind Energy Capacity and almost 32% of cumulative market share in India being no.1 OEM in India’s Renewable energy sector with 28 years of track record. Company’s manufacturing facilities are spread across 14 locations and specifically located in windy states of India such as Rajasthan, Gujarat, MP, Maharashtra, Telangana, Andhra Pradesh, and Tamil Nadu for manufacturing of various components such as Nacelle and Hub, Blade, Tubular tower, Generator, Transformer, Forging, Foundry and Mould. Company’s installed base as on 30th Sep. 2023 of 14.3GW is as shown in the figure below:

Figure 1 Source: Company Site

So far company is installed base stands at 14.3+ GW with 9600+ active turbines which are serving 1900+ global customers at 94 sites and having USD 10 Bn assets under management. Company receives 64% of its projects under Captive / Retail segment and remaining 36% from Central and State auctions out of which 53% of total order book is under EPC segment and remaining 47% is under non-EPC segment. Company also have ~6 GW of installed capacity outside India.


Company’s Key Clientele:

Figure 2 Source: Company Website

Fundamentals (FY22-23):

CMP

Rs. 42

52 - week high

Rs. 44.20

52 – week low

Rs. 6.95

Dividend % (consolidated)

- %

ROE

 259.2%

BVPS (Rs.)

0.9

Sales (Rs.) (Q2FY24)

1,421 cr.

Debt to Equity

1.73

P/E ratio

2.99

EPS (consolidated)

2.64

P/B ratio

8.82

Market Cap

59,208 Cr.

Face value

Rs. 2

 

 

 

Financial Results:

Company’s Net Sales was Rs 1,421.43 crore in September 2023 down 1.14%, Quarterly Net Profit at Rs. 102.29 crore in September 2023 up 78.11% and EBITDA stands at Rs. 232.30 crore in September 2023 up 33.14% as compared to September 2022. Company’s EPS has increased to Rs. 0.08 in September 2023 from Rs. 0.06 in September 2022.

Key Points:

  1. Company recently bagged a new order for the development of a 225 MW wind power project from Everrenew Energy Private Limited. Suzlon will install 75 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each at the client's sites at Vengaimandalam, Trichy district and Ottapidaram, Tuticorin district in Tamil Nadu.
  2. Company has also announced an order win of a 300 MW wind power project for Apraava Energy Private Limited. Suzlon will install 100 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each at the client's site in the state of Karnataka.
  3. Company has also bagged order for the development of 100.8 MW wind power project for the Indian subsidiary of a leading Nordic Energy Company. Suzlon will install 32 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3.15 MW each. The project is located at Karnataka.
  4. Suzlon has also bagged orders for the development of a 100.8 MW wind power project from Mahindra Susten Private Limited, the clean-teach arm of the Mahindra Group. Suzlon will install 48 units of their S120 - 140m wind turbine generators (WTGs) with a Hybrid Lattice tubular (HLT) tower and a rated capacity of 2.1 MW each in Maharashtra.
  5. Company has also bagged orders from KP Group for the development of a 193.2 MW wind power project which will be a part of Wind-Solar Hybrid and STU's (State Transmission Utility) tariff-based project for increasing Renewable Energy contribution in the state of Gujarat. Suzlon will supply 92 units of their S120 - 2.1 MW wind turbine generators (WTGs) with a 140m Hybrid Lattice Tubular (HLT) tower at Vagra and Vilayat in Bharuch district of Gujarat.
  6. Recently Suzlon entered a partnership with REC Limited for non-fund based working capital lines. Suzlon will utilize this facility for meeting working capital requirements for the execution of its current order book and future order pipeline.
  7. Company bagged yet another order from a leading global utility company for development of a 100.8 MW wind power project and install 32 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3.15 MW in Gujarat.
  8. Suzlon's S144, 3 MW - 3.15 MW wind turbine series recently received the RLMM (Revised List of Models & Manufacturers) Listing from MNRE (Ministry of New and Renewable Energy) which marks an important milestone for successful commercialization of the product. Suzlon has already installed the first prototype of this series at a hub height of 160m with a Hybrid Lattice Tubular (HLT) tower at the Gondal site in Gujarat.
  9. Company also received order of the 3 MW product series for the development of a 50.4 MW wind power project for Juniper Green Energy Private Limited. Suzlon will install 16 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower of their new product with a rated capacity of 3.15 MW each at the project located at Dwarka district in Gujarat and is expected to be commissioned in 2025.
  10. Company has bagged an order for 29.4 MW of wind installed capacity for 100 MW co-located wind-solar hybrid project from BrightNight, a global renewable power producer. Suzlon will install 14 units of their S120 - 140m wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each at Osmanabad in Maharashtra. The project is expected to be commissioned in phases, beginning in April 2024.
  11. Company has also announced a significantly large new order acquisition for its 3 MW series of wind turbines from Teq Green Power XI Private Limited, part of O2 Power Private Limited. Suzlon will install 64 of its largest wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3.15 MW each for the 201.6 MW wind power project which is expected to be commissioned in 2025.
  12. It has also bagged an order for 31.5 MW wind power project for Integrum Energy Infrastructure Private Limited. Suzlon will install 15 units of their S120 - 140m wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each in Maharashtra and Karnataka. The project is expected to be commissioned in May 2024.
  13. Suzlon bagged an order from First Energy 5 Private Limited (First Energy) a Thermax Group company for 3 MW product for the development of a 39 MW wind power project. It will install 13 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each. The project to be located at Thalaikattupuram, Tuticorin in Tamil Nadu is expected to be commissioned in 2024.
  14. It also bagged a significantly large order for its new 3 MW series of wind turbines to develop a 300 MW wind power project for Torrent Power Limited. Suzlon will install 100 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each. The project is in Karnataka and is expected to be commissioned in 2025.
  15. Company has recently crossed the 20GW wind energy installations milestone through 12,647 wind turbines installed across 17 countries spanning six continents solidifying Suzlon's position as a significant player in the global wind energy landscape.

In last 3 Years the stock gave a return of 495.89% as compared to the rise of Sensex and Nifty in the same period.

Currently out of total installed power generation capacity of 425GW as on Sep’23, 56% is through Fossil Fuel, 12% through Hydro, 17% through Solar, 11% through wind and 4% through other sources and Government targets 777GW power generation capacity by 2030 with 38% through solar, 10% through Hydro, 13% through Wind and 35% through Fossil Fuel which will enable 50% renewables in energy mix and 500 GW of non-fossil fuel energy capacity by 2030 and this will lead to 1 bn tonnes reduction in carbon emissions by 2030 and 45% reduction in emissions intensity of the economy by 2030. Looking at these ambitious plans of Government the company looks well poised to enjoy healthier order book going ahead in future. Mutual Fund Holding also increased by 3.96% in the last quarter to 4 and company has been continuously reducing its Net Debt which is a positive for growth oriented company. Considering company’s proven track record, almost 1/3rd market share in Wind energy sector, huge order book positions, bag filled with marquee clients and growth of Wind and Renewable energy sector across the globe in upcoming years investors can invest in this company for long term period.

 

HET ZAVERI

info@smartinvestment.in

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