Is Suzlon a turnaround story after FY16

Hi guys,
After discussing all the policies and little bit on demand today I would like to talk on Suzlon and where I see this company in coming years.

Please note that I like to go extremely mathematical and then support those numbers with qualitative aspects.

About Suzlon

1. Suzlon is an OEM and they make wind turbine generators. They are the 3rd largest player with 33% market share.
2. They have cumulative installed capacity of 19.5GW in 17 countries with almost 14.5GW in Asia.
3. They are a 25yrs old company and an end to end service provider

What is end to end ?

I think this is one of the major strength of Suzlon

4. Last year Suzlon did 807GW of business. Their current year first half is 15% higher than FY22 H1.
5. They have a ready capacity, workforce and ability to diliver 3.1GW per year.( this capacity is almost 4 times their FY22 output, this means sales can go 4x without addidional capex)
6. We have a target of 140GW by 2030 and here is what management has to say on it.

7. Suzlon had a debt of 2200cr and there is another 600cr of rights issue due, close to 200cr of cash, 2 assets which is non core to the business which they are planning to sell.
   a) 11 acre of land in pune
   b) SE Forge 100% subsidary of suzlon

NOTE- (Suzlon has the ability to take their debt level to 1000cr and interest cost to 100cr per year)

Demand analysis.
140GW is a pretty big target and has a lot of time to be achieved. Let us be conservative and try to predict the demand which Suzlon will have.( Please note will take reference from my previous post)

1. A total for 8GW of tender will be issued by central and state till 2026. Suzlon can get 2.5GW form this
2. As per MNRE there is a repowering need of 25.4GW up to 2030. Suzlon has a possability of 7.5GW from here. Let us take only 2GW up to 2026
3. Suzlon as on date has 1GW of order book. Out of this 284MW is from retail/PSU(please see next point)
4. PSU and C&I segment is not included in the above prediction where as because of ISTS wavier up 2025 they are aggressively setting up wind farms. 30% of Suzlon current order book is from this segment. This is further going to add to their demand.

As of today we have a 5.5GW of predictable order book this does not include the PSU and C&I which is a big segment.
So for the next 3.5yrs we have 5.5GW of visible demand. Since this is the base case assumption and does not include some big segments I think this is not optimistic at all.

My expectation for Suzlon is 1.5GW of business in FY25 or FY26. This is 85% higher than FY22.
This cost of debt might come to 100cr. I am expecting 1.5 EPS from them(this is extremely conservative because their incremental margin on new sales keeps increasing)

I am expecting 25rs to 30rs by FY25 or FY26.

ADD ON

1. They have their AMC business which has been flat form many years because of no new big capacity being set up post 2017.
   ( If somebody can please quantify this by taking last year AMC revenue divide by their asset under management which is 12GW and multiply this to 5.5GW)
2. Suzlon is also planning to do AMC business for other turbines which has not been developed by them. This segment has 40% as EBITA margin and is pretty big

Their new prototype is also a big add on which can produce 3.1GW

With favorable policy and huge demand I feel there is a good opportunity for suzlon in the coming years.

I would love to double my qty in this stock below 10rs.
This is 3.5% of portfolio on CMV of my portfolio with 8.25rs as avg price.