Suzlon Energy expects to almost quadruple its sales volume in 2013-14 by delivering wind turbines to generate 900-1,000 mw, compared with just 250 mw of equipment supplied last year.
"We believe the worst is over and that we are moving in the right direction, with a more positive external environment. We hope to have the company back in a position of strength by FY15," chairman Tulsi Tanti said.
Tanti, who was rated as the eight richest Indian in 2005 on the Forbes list of Richest Indians, built Suzlon from scratch into the country's largest maker of wind turbines in less than a decade.
He made big-ticket acquisitions, such as of German REpower Systems, to fuel his global ambitions, in the process accumulating debt of Rs 14,000 crore — almost six times its current market capitalisation. The burden of debt, coupled with a slowdown in the industry, pushed Suzlon into losses and eroded the wealth of Tanti.
These concerns have weighed on Suzlon's shares, which are down almost 47% from their year-earlier levels, even as the Bombay Stock Exchange's Sensex gained 8%. However, helped by a recent improvement in order execution and new orders, the shares have gained almost 70% since August, when they touched a 52-week low of Rs 5.76, to Rs 9.73 Thursday.
Suzlon sees better times ahead driven by its debt recast that is underway and early signs of a recovery in the global wind-energy market. Tanti is geared up for the new innings. "I am a fighter. I will not give up," he said. "Last two years, our entire focus was on liability management.
Now that we have completed the process, we are focusing on increasing execution and improving operational performance." Suzlon reported a loss of Rs 4,700 crore for the fiscal year ended in March 2013. The company's expectations of a turnaround are based on its strong order book — at the end of October, it had orders for 5.1 gigawatts, worth about Rs 43,834 crore and giving revenue visibility for two years. Also, in January this year, a consortium of 19 banks, led by State Bank of India, inducted Suzlon into a corporate debt-restructuring (CDR) programme for recasting Rs 9,500 crore of loans.
This has given the company a twoyear moratorium on principal and interest payments and additional working capital limit that would improve its cash position and drive order execution. Tanti said Suzlon expects India to add about 1,800 mw of wind-energy capacity in this fiscal year, aided by the government's policy on providing cash incentives to companies based on the actual power they generate, and push for wind projects in states.
"At the Suzlon level, with adequate working capital facilities, we should be in a position to achieve 500-600 mw from India, and 300-400 mw internationally," Tanti said, explaining his projection to sell 900, 1,000 mw of turbines this fiscal year. Analysts said the company has delivered projects totalling 440 mw in the first half of the financial year and is seeing a sustained pickup in project execution.
"We have added new products such as the 3 mw turbines and entered new geographies," Tanti said. "Also, the most important development is that some of the matured markets, where capacity addition had slowed, are now looking at wind energy again. The US, Canada and Germany are again upbeat about wind energy and they would award big-ticket orders," Tanti said.
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