How Suzlon Energy weathered the storm to become profitable again

Swati Khandelwal Jain | Updated on: Jan 19, 2018

BL04_P6_TANTI

Restructuring and stake sale helped the company, says Founder Chairman Tulsi Tanti

After grappling with debt of over ₹12,000 crore, Suzlon’s restructuring and stake sale have helped in bringing down the liability to a comfortable level of ₹8,000 crore. The world’s fifth largest wind turbine manufacturer is finally on track to profitability after recording positive EBITDA growth for the fourth straight quarter at the end of December 2015. Speaking to Bloomberg TV India, Suzlon Founder Chairman Tulsi Tanti said the company hopes to come back to profits this financial year. Next fiscal, the renewable energy market is poised to grow 30 per cent and Suzlon hopes to grow more than that, he said.

Suzlon has really slogged hard to bring down the debt burden to almost half at a time when stressed assets of India Inc is on the rise. How did you achieve this feat given the slowdown? Can you elaborate on the austerity drive and the revamp in operations?

I think in the last three years we have passed through very difficult times and most of the time and energy went into liability management.

But we are lucky that we have sold out our German subsidiary and got ₹7,200 crore. Also, with the help of Dilip Shanghvi Family and Associates (DSA) group’s equity investments in Suzlon Energy Ltd, we raised ₹1,800 crore. So, we have been able to bring almost ₹9,000 crore into our company as cash and have been able to reduce the debt from ₹12,000 crore to ₹8,000 crore. So, the debt is now at a comfortable level.

Whatever debt repayment or FCCB repayment we have, it is not coming before March 2018.

We have a covered bond — it is a $600 million bond — which we have to pay in 2023. So, we are not worried about the fact that repayment obligations are coming up so fast.

In the next three years, we will not be having much outflow for repayment. Yes, we have to pay the interest. In case of interest cost, the reduction of debt and optimisation of the infrastructures, we have reduced our interest cost by almost 50 per cent.

We are very comfortable now.

What’s your plan for capex in the coming years? What’s the outlook for the coming year?

Our manufacturing capacity and capability of the company is 4,000 MW. Last year, we have done only 400 MW. Because of that our debt looks big. But this year, we are doing 2.5 times growth in capacity expansion.

Next year, the market is growing 30 per cent and we will grow more than 30 per cent. We have addressed our cost structures and brought it down and enhanced the margin. Our EBITDA margin is the highest in the industry. We are well positioned. We have completed 20 years in the Indian renewable energy market. So we have a great opportunity to go back to the growth track.

When do we see Suzlon become profitable again?

Very soon. All my stakeholders are watching me and hoping when Tulsi Tanti will record a profit. This financial year, we will.

Published on March 03, 2016
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you