Thank you @Navin_J
Also, in line with the turnaround story, I wish to add some points, and will try not to duplicate previously mentioned points:
• Substantial orders secured post FY23 end (890 MW), with a total order book of 1542 MW. The new orders are for the larger 3.x MW turbines. There is going to be an emphasis on quality orders with better margin potential
• Significant improvement in reducing net debt, and the company has a positive net worth (₹1099 cr) after 10 years
• India keen to approve bids for 10 GW of wind power annually (does not include solar-wind hybrid projects, which will increase this figure further). At least 8 GW of new wind capacity will be required annually to reach a 100 GW wind capacity by 2030
• The company is focusing primarily on India, due to the massive tailwinds, and is avoiding overseas markets in the interim
• Upgrading existing wind farms with better turbines/technology can further add to growth
• Company’s OMS team is well respected in the industry, and can work with turbines from different manufacturers
• Only expecting a maintenance capex of ₹100 cr in FY24. May need to invest ₹100-150 cr over and above maintenance capex in FY25 for capacity augmentation
• In Q4FY23, the company earned ₹320 cr in net profit. Assuming the next four quarters are identical (a conservative assumption), then the current Market Cap/FY24 Earnings ratio is 17.39 (from 22267/1280), a very reasonable multiple
• The company’s OMS (operations and maintenance services) are free for the initial two years, and it’s an amazing sign when 100% of existing OMS contracts are retained when they come up for renewal each year (need to confirm the years being talked about), versus 75% for Vestas and Gamesa. In addition, Suzlon’s OMS team is happy to service non-Suzlon/multi-brand wind farms
Sources:
Q4FY2023 Earnings Transcript and Investor Presentation
The Return of Wind – Forbes
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