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Published: November 4, 2023
Updated: November 4, 2023

Suzlon Energy's Strong Q2 Results and Order Book Sends Shares Soaring to a Nine- Year High

Shares of Suzlon Energy, the renewable energy company, hit a nine-year high of Rs 34.44, up 5%, on the BSE following the impressive Q2FY24 results.

The company's consolidated profit after tax grew by 82% YoY to Rs 102 crores in Q2FY24, primarily driven by cost reductions. Suzlon Energy recorded higher EBITDA margins (pre- FX) of 15.8% compared to 14.5% in Q2FY23. Despite a slightly lower YoY volume, Suzlon Energy has a sustainable supply pipeline to work with as its order book stands at a healthy 1,613 MW at the end of Q2FY24.

Financial Outlook:

Following a successful qualified institutional placement (QIP) conclusion in August 2023, which made Suzlon Energy debt-free, the company has reported a further reduction in quarterly net finance cost by around 61% YoY. CRISIL expects the profitability of Suzlon Energy to grow and achieve EBITDA above Rs 750 crores in fiscal year 2024, driven by increasing fleet base of O&M business and positive tailwinds in the Indian wind sector leading to expectation of increasing execution volumes.

Business Strategy:

Suzlon Energy has taken cost optimization and rationalization efforts over the past few years, and as a result, the wind turbine business was able to achieve EBITDA of Rs 48 crore in fiscal year 2023 with an execution volume of 664 MW. It has also taken other steps for operating margin protection, such as focusing on orders with better margins, receivable profile and pass-through for material cost escalation, highlighting a focus on profitability.

Suzlon Energy's ability to streamline operations, optimize costs, and maintain its dominance in the renewable energy industry is evident in the strong financial performance recorded in Q2FY24. The company's debt-free status following the successful QIP conclusion and high order book indicates that it is well-positioned to capitalize on the opportunities in the Indian wind sector. Suzlon Energy is likely to sustain its upward growth trajectory and reach new heights in the years to come.