Overview

Company ProfileConceived in 1995 with just 20 people, Suzlon is now a leading wind power company with:

· Over 14,000 people in 21 countries

· Operations across the Americas, Asia, Australia and Europe

· Fully integrated supply chain with manufacturing facilities in three continents

· Sophisticated R&D capabilities in Denmark, Germany, India and The Netherlands

· Market leader in Asia and 3rd largest wind turbine manufacturer in the world, Suzlon Market

Share (Combined with REpower) rose to 12.3% thereby making Suzlon 3rd largest wind

turbine manufacturing company in the world

· Listing : BSE and NSE (India), part of S&P CNX Nifty Index

INDIAMarket Overview

· India ranks 3rd worldwide in terms of total installed wind power

· India is one of the few countries in the world to have a Ministry of New and Renewable Energy

(MNRE) dedicated to promoting the use of clean, green and environment-friendly renewable

energy

· As per the assessment of CWET (Center for Wind Energy Technology, a Government of India

undertaking), the harnessable wind power potential in India is over 45,000 MW, spread over

13 States & Union Territories

· As per Ministry of New and Renewable Energy (MNRE) data, the cumulative wind power

installed capacity in India exceeded 10000 MW as on March 2009

· India has emerged as a hub of wind turbine manufacturing, with a capacity of over 3000 MW

per annum

· Wind turbine technology has been greatly indigenized, and is robust and mature

· Progressive policies, regulatory support, Progressive policies & regulatory support such as

Renewable Power Obligation (RPO), Generation Based Incentives ( GBI), Prime Ministers

National Action Plan on Climate and fiscal incentives for private investors have been driving

the growth of wind power in India

· Other attractive policy initiatives such as REC, TTC are also on the anvil by the GoI

· Going forward, the market is expected to witness the emergence of large scale development

propelled by local and international Independent Power Producers (IPPs), on similar lines as

other major global markets

· As per Ministry of New and Renewable Energy (MNRE), a target of 14000 MW from Grid

Interactive Renewable power has been planned for 11th Five Year Plan period (2007 to 2012);

of this, 10,500 MW will be generated from wind

FinancialsThe wind industry has enjoyed a period of uninterrupted growth of 34% CAGR over the past 5 years.

To outline our consolidated performance as a group for the first 9 months of the financial year 2009, our

revenue grew from 8,756 crores rupees to 17,277 crores of rupees, a growth of 97%. The world is now

looking for the energy security with the governments, looking to diversify energy source, to mitigate

the geopolitical risk around oil and gas supplies.

Scrip code: BSE 532667, NSE SUZLON, Bloomberg SUEL IN, Reuters SUEL.BO

Financial RemodellingSuzlon undertook a Liability Management exercise for the existing USD 500 million Foreign Currency

Convertible Bonds. The debt covenants have been modified and redefined. There has been a reduction

in liability by USD 111 million through buyback and exchange mechanism. Suzlon's endeavour to

continue consolidating their financial and business structure in FY 2009-10. Focus will be on

continuous reduction in the intensity of working capital deployment and inherent reduction of the

quantum of debts.

Key IndicatorsKey Indicators as on 21/01/2010

Closing Price (Rs.) 82.95

EPS (Rs.) -6.181733008

P/E -13.41856724

BV per Share (Rs.) 42.79189417

PB 1.938451233

Mkt Cap (Rs. Crore) 12913.08981

Beta 1.597

Returns 1 mth % -1.367419738

Returns 12 mth % 66.39919759

Exc ret over Nifty (12 mths) -21.84424789

Yield % 0

Shares outstanding 1,55,67,31,743

Avg. daily vol. (30 days) (Rs. Crore) 72.16542332

   

Share holding (%) 01-12-2009

Promoters 53.08

Public 16.15

FIIs 15.52

Others 15.25

Facts· As a result of dilution of effective stake of Suzlon in SE Forge and sale of stake in

Hansen, there is an increase in net unrealised gain on dilution of Rs 203 crore

· The increase in loan funds was primarily on account of loans taken for capital

expenditure incurred in establishing Special Economic Zone (SEZ) based

manufacturing facilities, increased working capital requirements and consolidation of

REpower. Out of the total outstanding loan is towards REpower acquition and Rs

1,688 crore (11.3%) is on account of Hansen acquisition.

· The Company recorded a net deferred tax liability of Rs 187 crore as at March 31, 2009

as compared to Rs 22 crore as at March 31, 2008.

· The net addition to capital expenditure amounting to Rs 4,335 crore (excluding

goodwill) comprises of additions towards gross block of Rs 3,471 crore and Rs 864

crore towards increase in capital work in progress.

Interpretation

Operating Profit Margin (%)Operating Profit margin gives an idea of how much a company makes (before interest and

taxes) on each dollar of sales. When looking at operating margin to determine the quality of a

company, it is best to look at the change in operating margin over time and to compare the

company's yearly or quarterly figures to those of its competitors. In this case the operating

margin is decreasing. If a company's margin is decreasing, it is earning less per dollar of sales.

Return On Capital Employed (%)ROCE should always be higher than the rate at which the company borrows, otherwise any

increase in borrowing will reduce shareholders' earnings. In this case it is decreasing and its

definitely affecting the shareholder value which can be seen from the EPS

Return on Assets (ROA)An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to

how efficient management is at using its assets to generate earnings. Calculated by dividing a

company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes

this is referred to as "return on investment". In this case ROA has decreased drastically in 2009

Net Working CapitalA company can achieve profitability but short of liquidity if its assets cannot readily be

converted into cash. Positive working capital is required to ensure that a firm is able to

continue its operations and that it has sufficient funds to satisfy both maturing short-term debt

and upcoming operational expenses. In this case they have maintained positive working

capital.

Debt/Equity RatioIt indicates what proportion of equity and debt the company is using to finance its assets. A

high debt/equity ratio generally means that a company has been aggressive in financing its

growth with debt. In this case they have increases on Debt/Equity Ratio in the recent past as

they are trying to enter emerging markets

Net Cash used in Investing ActivityIn case of Suzlon Energy limited, the investing activity increases during the 2008/2009. As

there is increase in investing activity there will be increase in the financing activity which is

clearly visible from the cash flow statement

Trend of Investment on fixed AssetThere is an increase in the fixed asset of the company which is clearly visible in the Balance

Sheet. The rationale behind the increase in the fixed asset is that the company is a growing

company and there is lot of opportunity available in the market to expand. In expansion we

need financing so there is an increase in financing activity and similar investing activity has

increased to take advantage of the market scenario. All countries are searching a suitable

renewable energy source and it is one of the best in market in providing solution to these sort

of issues

Suzlon Energy Limited is also taking advantage of the mandate of Carbon gas emission to be

reduced by developed country. They are searching an opportunity to invest in renewable

energy in their country or in developing country to gain some carbon credits so that they can

reduce their Carbon Emission. This has definitely helped Suzlon to gain a good market share in

different countries.

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Capital Structure

 

                                   

                                                       

                                       

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Debt/Equity Ratio

 

      

                                                       

                                                       

                                 

Cash Flow

 

   

                                                       

                                                       

                                                       

                                         

Dividend HistoryDividend History

     

       Year Equity Dividend (%)      Interim-I Interim-II Final1995-1996 0% 0%1996-1997 0% 0%1997-1998 0% 0%1998-1999 15% 0%1999-2000 40% 0%2000-2001 20% 0%2001-2002 40% 120%

2002-2003 50% 0%2003-2004 30% 0%2004-2005 40% 0%2005-2006 25%  2006-2007 50%    2007-2008    

Cost of CapitalEquity Beta 1.5Risk free rate (%) 6.50%Equity risk premium (%) 4.50%Country risk premium (%) 0.50%Cost of equity (%) 14.80%Cost of debt (%) 10.00%Debt/capital (%) 20.00%Tax (%) 33.00%WACC (%) 13.20%Terminal growth rate (%) 1.00%

Bonus and Split HistoryBonus History     

History of Bonus SharesDate Ratio

01-10-2000 1 share for every 22/26/2002 1 share for every 19/30/2003 1 share for every 19/25/2004 2 shares for every 16/24/2005 2 shares for every 1

Split History    Announcement Date Old Face Value New Face Value

23-10-2007 10 2

Recent Performance-------

Adj closing price

------- Traded shares   -------  

(Rs. Crore)

08-Jun 08-Sep 08-Dec 09-Mar 09-Jun 09-Sep

  3 mths 3 mths 3 mths 3 mths 3 mths 3 mthsTotal Income

1496.28 2264.66 1599.32 2485.91 598.69 689.44

Net Sales

1473.24 2234.47 1504.29 2039.94 314.95 627.29

Other Income

23.04 30.19 95.03 445.97 283.74 62.15

Extra-ordinary Income

0 0 51.61 78.69 239.37 9.86

Change in stock

115.51 94.18 -37.53 -103.79 -64.13 -98.3

Expenditure

1523.75 2341.86 1952.72 2565.48 695.03 776.05

Consp. raw mat.

981.54 1473.59 886.72 1270.37 172.65 351.9

Personnel cost

57.93 45.87 53.58 41.69 44.44 37.04

Other expenses

366.95 644.8 646.8 963.98 319.03 197.64

Extra-ordinary exp.

26.46 47.77 233.13 103.74 0 0

PBDIT

178.91 146.81 -258.44 2.34 -1.56 4.56

Interest

38.2 76.69 109.43 155.8 138.74 170.53

PBDT

140.71 70.12 -367.87 -153.46 -140.3 -165.97

Depreciation

21.71 24.49 23.06 29.9 19.7 18.94

PBT 119 45.63 -390.93 -183.36 -160 -184.91 Tax

30.96 28.65 0 0 0.47 0

PAT 88.04 16.98 -390.93 -183.36 -160.47 -184.91Adjusted EPS (Rs.)

10.25184953

8.016884227 4.236814716 -0.860044021 -4.690730546 -6.181764776

Growth (%)

           

Net sales

75.55499946

31.86059 -9.431951594 -25.72312846 -78.6219489 -71.92667612

Total expenses

64.14767096

62.35069014 44.41486215 13.30324256 -54.38687449 -66.8618107

PBDIT

31.09840991

-64.82666092 Error -99.5785758 Error -96.89394455

Interest

32.1799308

171.8539525 206.0979021 379.679803 263.1937173 122.3627592

PBDT

30.80784605

-81.98263015 Error Error Error Error

PAT

-1.521252

796

-95.2247033 Error Error Error Error

Profitability (%)

           

PBDIT/Total income

11.95698666

6.482650817 -16.15936773 0.09413052 -0.260568909 0.661406359

PBDT/Total income

9.403988558

3.096270522 -23.0016507 -6.173192111 -23.43449866 -24.07316083

PAT/Total income

5.883925468

0.749781424 -24.44351349 -7.375970972 -26.80352102 -26.82031794

PBDIT netof PE&OI/OpInc

13.94002335

8.708105278 -5.113375745 1.34268655 -76.4978568 -0.844904271

PBDT netof PE&OI/OpInc

11.34709891

5.275971483 -12.38790393 -6.294792984 -120.5492935 -28.03009772

PAT netof PE&OI/OpI

6.20808558

1.546675498 -16.80726456 -25.76497348 -141.0414351 -39.38529229

ncPrice (Rs.)

215.9 152.25 62.3 42.4 103.7 91.65

P/E 21.0596146

18.9911686 14.70444288 -49.29980208 -22.1074306 -14.82586338

  Mar-00

01-Mar

02-Mar

03-Mar 04-Mar 05-Mar 06-Mar 07-Mar 08-Mar 09-Mar

  12 mths

12 mths

12 mths

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Total income

155.1

395.5

541.05

383.77 832.37 1940.77 3857.74 5529.43 7184.98 7413.93

PAT net of P&E

26.44

83.31

103.64

22.86 119.06 361.67 821.67 998.33 1315.87 -279.92

GFA

8.38

17.92

54.59 80.39 159.1 217.87 400.41 567.04 779.2 915.83

Net

53.88

132.73

225.34

284.56 416.83 929.57 2822.25 3713.31 6947.66 6580.32

WorthBorrowings

12.84

20.68

44.71 87.63 220.66 322.54 335.37 1136.64 3084.74 7329.48

PBDITA/Total income (%)

18.85880077

24.7661188

4

22.5912577

4

10.06853063

18.28153345

23.92555532 25.78348982 23.21487025 23.30987699 1.958475464

PAT netof P&E/Tot inc(%)

18.52553219

21.4883791

7

20.9190569

2

19.10622711

18.12647534

18.62796127 21.2868156 19.41126327 17.83700067 -6.316439849

RONW

66.63534938

90.7668399

3

62.2448124

7

25.57364189

41.60310241

53.6942959 43.77555426 32.47281029 23.74474368 -6.922245598

ROCE

58.3025

88.5600752

9

58.6387434

6

22.20670629

32.94011401

45.38571644 40.1279301 29.69299369 18.55607682 -4.551846496

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