SUZLON - SUZLON ENERGY LTD. Share Price

In the Q1 FY26 earnings conference call, management of Suzlon Energy Limited provided an optimistic outlook. They highlighted a record-breaking performance with 444 MW delivered, translating to a 62% year-on-year growth. The total consolidated revenue for Q1 FY26 reached INR 3,117 crores, with a robust EBITDA of INR 599 crores, marking a 62% increase compared to the previous year.

Management expects the wind power industry to see close to 6 GW of installations for FY26, following over 2 GW already commissioned within the first four months of the fiscal year. Their order book has surpassed 5.7 GW, indicating strong customer confidence and market position, particularly in the PSU and C&I segments. The company aims for a year-on-year growth of 60% across key performance parameters for FY26.

On manufacturing capacity, they reaffirmed that the 4.5 GW capacity is fully operational, with 117 MW commissioned in Q1 and 547 MW in the pre-commissioning stage. Management noted the ongoing efforts to mitigate land acquisition delays by prioritizing projects with land readiness.

They also emphasized their commitment to upholding high ESG standards while focusing on timely execution. Suzlon's S144 turbine boasts the lowest carbon footprint in its category and is fully compliant with the latest MNRE regulations. Additionally, the company highlighted a net cash position of INR 1,620 crores and secured bank limits of INR 7,000 crores for capital expenditure needs.

Overall, management conveys confidence in sustainable growth driven by operational improvements, robust order book, and favorable regulatory changes in the wind industry.

Here are the major questions and their detailed answers from the Q&A section of the earnings transcript dated August 12, 2025:

1. Question: "The Q1 interest cost seems to be up quarter-on-quarter, even though the company is net cash. Is there any specific reason? What is the sustainable tax rate we should be working with going forward?"

Answer: "On interest costs, we incurred onetime processing fees for working capital optimization. This will help us in reducing bank guarantee and LC charges moving forward. As for tax rates, we expect it to stabilize at around 25% for the year, with cash outflow possibly next year depending on performance."

2. Question: "How is the order inflow opportunity looking like given concerns regarding power purchase agreements and land acquisitions?"

Answer: "We see a stable order inflow, with 54% from C&I and 21% from PSU segments. The ongoing discussions and confirmed orders indicate no slow down; our current orders are backed by signed PPAs. Thus, future order flows appear strong."

3. Question: "Can we expect an improvement in margins given the increase in PSU and C&I orders? Will it be offset by a higher share of WTG in the revenue mix?"

Answer: "We maintain a guidance of contribution margins around 23%. Our margins have improved, and while fluctuations may occur, we anticipate maintaining this level due to the favorable order mix that includes higher-margin segments."

4. Question: "If the BESS storage technology improves, how will it affect the relevance of wind energy?"

Answer: "Storage won't replace wind; rather, they will coexist based on different demands and contexts. Wind typically provides power during peak hours, and combined systems can optimize energy usage, balancing generation from both sources."

5. Question: "With the recent ALMM localization, will there be short-term disruptions in supply chains?"

Answer: "We don't foresee any disruption; the industry has sufficient capacity and is prepared for the change. Utilization of local suppliers will increase, leading to potential cost reductions as they ramp up production to meet demand."

6. Question: "What are your thoughts on the competitive landscape, especially with the recent exit of a European player from India?"

Answer: "While competition is increasing, we're confident in our proven product reliability and our service capabilities. Our long-standing presence and customer trust in our comprehensive service offerings will help maintain our market position."

7. Question: "What is the expected contribution of SE Forge in light of increased domestic manufacturing requirements?"

Answer: "The demand for domestic components will significantly benefit SE Forge. With ALMM regulations necessitating local sourcing, we anticipate growth in orders for our foundry and forging products."

These answers reflect the company's strategies and projections for their current fiscal year, articulating their confidence in growth and adaptation within the evolving industry landscape.