Suzlon Group, a renewable energy solutions provider, generated revenue of ₹38.52 billion (~$587.24 million) in the first half of financial year (FY) 2017-18. The company announced pre-forex earnings before interest, taxes, depreciation, and amortization (EBITDA) of ₹5.82 billion (~$88.72 million), and an EBITDA margin of 15.1 percent. The company generated net profit of ₹1.17 billion (~$17.83 million) in H1 FY 2017-18.
Suzlon’s working capital debt was ₹32.44 billion (~$494.55 million) and the net term debt was ₹67.47 billion (~$1.028 billion) in H1 of the current fiscal. There has been a minor increase in working capital debt due to higher utilization of working capital limits.
“Indian wind industry is in transition from FiT to competitive bidding mechanism. Indian government’s commitment to Renewable Energy remains intact and we strongly believe that the long-term fundamentals of the wind industry are sound. This transition has a temporary impact on installations in FY18, due slow beginning of bidding and delay in regulatory approvals. However, we are confident that the industry is likely to regain its momentum with 6 GW+ volume expected in FY19. It will soon migrate towards a 10 GW market size. With the newly discovered tariff, Wind is competitive with respect to other sources of energy and has emerged as a mainstream energy source,” said J P Chalasani, Suzlon Group CEO.
The advent of reverse auctions has led to a temporary uncertainty due to the transition from the FiT regime. We have focused on cost optimization across the board including COGS, fixed costs and interest, in order to become more competitive in this changing market scenario. With strong project pipeline and customer tie ups, we are confident of quickly ramping up volumes and execution to meet the expanded market requirements. Our priorities are to continue to ramp up volumes, build strong order backlog, optimize costs across the board, and maintain disciplined working capital level, said Kirti Vagadia, Suzlon Group CFO.
Due to the introduction of reverse auction for developing wind projects, the pace at which such projects are being tendered and auctioned has picked up. States like Tamil Nadu, Gujarat are following in Solar Energy Corporation of India (SECI)’s lead and conducting large scale wind tenders. This paints a brighter future for wind companies as there will be many avenues of expansion and consolidation.
Image credit: By Winchell Joshua, U.S. Fish and Wildlife Service [Public domain], via Wikimedia Commons