With an estimated order book of $7 billion, the company expects revenues to touch Rs 2,700 crore by current fiscal end
Suzlon Energy Ltd (SEL), after facing a rough weather including withdrawal of accelerated depreciation and non-extension of generation-based incentives (GBIs), has now turned the bend after eight quarters and reported positive EBITDA of Rs 73 crore in the first quarter of this fiscal (2014-15) with a strong order book of 4.9 GW.
The order book services, estimated at $7 billion, would be a key growth driver for revenues, said Kirti Vagadia, head finance at Suzlon group. Aided by the orders, the revenues are expected to touch Rs 2,700 crore by the current fiscal end, he said. The company, which underwent corporate debt restructuring (CDR) process, has come out of the exercise in FY14.
On the financial restructuring front, the company plans to reduce its debt of Rs 9,000 crore by tapping equity market to the extent of Rs 4,000 crore and another 500 million euros through the foreign currency convertible bonds route.
Through this, the foreign debt of $1.2 billion would stand increased to $1.7 billion but then there would be a massive drop in interest rate burden from the present 11% to 6%. The issues are slated between October and March of the current fiscal year, Vagadia told at a select media briefing on Saturday.
"Operations and maintenance services (OMS) have been reorganised into a separate company, Suzlon Global Services Ltd (SGSL)," Vagadia said. This space is expected to grow at 30% annually he said. The business is broadly classified into four categories viz, component manufacturing, wind turbines, engineering and processes and OMS.
The group, which is the world's fifth largest wind manufacturer, has cumulative installed capacity of 24,726 mw installations in over 31 countries, and stands to gain immensely after the present government restored accelerated depreciation and GBIs in its July budget this year.
The impetus would add 20,000 jobs annually in the sector besides the contribution to power generation which is currently at 5% and seen doubling over the next five to eight years, Vagadia said.
With this impetus, the Indian wind market is poised for rapid growth doubling the market size from 2000 mw in FY14 to 4000 mw in the next 3 years and register a 20% growth annually.
The benefits were pulled off by the UPA-led government in its 2012-13 budget by the then finance minister, P Chidambaram.
Now with the benefits restored, the industry is expecting improved cash flows through tax deferrals that will help creating wealth by raising equity, industry experts said.
At least 1200 mw will get added every year with the restoration of government's incentivisation programme, they said. Suzlon stands to gain the most being the largest in India in this space as more corporates for two main reasons one for the depreciation benefits and second for maintaining its corporate social responsibility mandate. In addition to this, corporate clients would enter the wind energy space through Suzlon that is into manufacturing, installing and maintenance of wind turbines.
With 21000 mw capacity, Indian ranks 5th in the world in terms of installed wind capacity, next to coal & hydro.
According to Vagadia, the company has improved its average energy yields in the last two years by 25% through higher generation wind turbines, lowering costs through hybrid towers and increasing heights for better winds.
Disclaimer: The correspondent's trip to Bhuj was organised by Suzlon Energy Ltd
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