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Suzlon's Profit Stumbles Despite Record Turbine Shipments
29 Oct
Summary
- Revenue grew 26% to Rs 4,869 crore, but EBITDA remained flat at Rs 720 crore.
- Core wind business margin fell to 8.8% due to cost pressures and contract mix.
- Services segment provided a profit cushion, accounting for over a third of profit.
In the September quarter, Suzlon Energy reported a 26% year-on-year revenue increase, reaching Rs 4,869 crore, driven by record turbine shipments in India totaling 710 MW.
Despite higher revenues, consolidated EBITDA was Rs 720 crore, showing no growth from the previous year's Rs 721 crore. The EBITDA margin contracted to 14.8% from 18.6% in the prior year's quarter.
The primary pressure point is Suzlon's core wind business, Renewable Energy Solutions. Although segment revenue grew 30% to Rs 4,211.6 crore, its segment result declined 22.5% to Rs 370.5 crore, pushing the margin down to 8.8% from 14.8%.
This margin compression is attributed to increased material, component, and service costs, which rose 36% against a 26% revenue increase. A growing share of Engineering, Procurement, and Construction (EPC) contracts, now 38% of the order book, contributes to higher revenue per megawatt but also includes more bought-in costs.
External factors such as commodity and currency volatility also strained performance. Other expenses increased by 28%, while employee costs remained stable.
Conversely, Suzlon's asset management services segment provided a significant financial buffer. This segment's revenue rose 11% to Rs 639.6 crore, with its profit jumping 51.5% to Rs 220.4 crore. It accounted for over a third of the company's total segment profit.
Management anticipates operating leverage in the second half of the fiscal year, historically a stronger period for project commissioning. The company holds an order book of 6,009 MW, with 1,295 MW of turbines already erected and awaiting finalization.
