Suzlon, had recently restructured its FCCB (Foreign Currency Convertible Bonds) at a conversion price of around Rs 100/sh. Since, they have gone on record stating that they expect this year to be a down year for wind, as companies in Europe are postponing orders, as the debt crisis makes it difficult to raise funds for renewable-energy projects. This is also primarily due to reluctance by developers to move on new wind projects amid diminished demand.
Suzlon Energy has reported a consolidated loss of INR 1.88 Billion for the fourth quarter ended March 2010, whereas the company had reported a profit of INR 3.15 Billion during the corresponding period a year earlier. Total income of the firm stood at INR 61.74 Billion during the January-March quarter of FY10, while the same was at INR 93.21 Billion during the same period a year ago.
According to reports (here and here), Sales volume for the fourth quarter fell to 650 MW from 1046 MW and to 1460 MW from 2790 MW for the fiscal year from last fiscal year. The company had earlier projected sales of 1900 MW to 2100 MW for the year.
With the installation in India being range bound between 1470-1750MW a year over the last five years and the installed capacity for 2009-10 at around 1565MW, Suzlon has been facing increasing competition on the home turf with newer players entering the India market.
A number of global players from Spain including Gamesa and Siemens from Germany have announced ambitious plans to enter the wind market in India. However what will be interesting to see if these OEM’s are able to provide the kind of turnkey EPC services that Suzlon and other OE leaders in the Indian market provide on an end to end basis. This is going to be the key challenge for any new player in the Indian market.
However, Suzlon does face considerable challenge in maintaining the its market dominant position in India and given the challenges in Europe and America that they have highlighted 2010 seems to be a challenging year for the Indian market leader globally.