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Market View On SUZLON

Discussion in 'Stock Market Discussions' started by capitalstars05, Oct 7, 2015.

  1. capitalstars05

    capitalstars05 New Member

    Sep 26, 2014
    Likes Received:
    Suzlon Energy Limited (“Suzlon” or the “Company”) is an India-based vertically integrated wind power company which was set up in the year 1995. The Company along with its subsidiaries is in the business of selling and installing wind turbine generators (WTGs). it delivers end-to-end wind power solutions including assembling, installation to commissioning. The company manufactures blades, generators, panels, and towers and state-of-the-art large or offshore turbines, in-house and through its subsidiary. The Suzlon Group consists of Suzlon Energy Limited and its 78 subsidiaries (13 Indian and 65 international) and is present in 33 countries across six continents. India currently has over 17,000 MW of wind power capacity, and nearly half of this has been built by the Suzlon Group, making Suzlon India’s largest wind turbine manufacturer for 10 consecutive years. It recently announced crossing 8,000 MW of cumulative installations in India, underlining the strong momentum in India's fast growing wind energy market. This cumulative power generation capacity has the potential to light up four million homes annually. In terms of market share, Suzlon is the fifth largest wind turbine manufacturer by cumulative installed capacity worldwide, with 20,000 MW of installations in 32 countries, delivering uptime levels above the industry average of 97%


    Current price - BSE 20.40
    Current price- NSE 20.40
    Market Capitalisation- 9844.55
    Face value - Rs. 2
    EPS (TTM) Rs. -15.03
    P/E -1.36
    Sector - Renewable Energy
    No of shares - 4825757744
    Average Volume - BSE 3892252.00
    Average Volume - NSE 21164123.00
    BSE Code - 532667
    NSE Symbol - SUZLON

    Liquidity and Credit Analysis

    Current Ratio Higher current ratio implies healthier short term liquidity comfort level. A current ratio below 1 indicates that the company may not be able to meet its obligations in the short run. However, it is not always a matter of worry if this ratio temporarily falls below 1 as many times companies squeeze out short term cash sources to achieve a capital intensive plan with a longer term outlook. Suzlon’s current ratio for FY 2012 was 0.97 and its average current ratio over the last 4 financial years has been 1.08 times which indicates that the Company is reasonably placed to pay for its short term obligations.
    Long Term Debt to Equity Ratio Companies operating with high long term debt to equity on their balance sheets are vulnerable to economic cycles. In times of slowdown in economy, companies with high levels of debt find it increasingly difficult to service the interest on their borrowings as profit margins decline. We believe that long term debt to equity ratio higher than 0.6 - 0.8 could affect the business of a company and its results of operations. Suzlon’s current long term debt to equity ratio for FY 2012 is 1.42 and its average long term debt to equity ratio over the last 4 financial years has been 1.64 times which indicates that the Company operates with very high level of debt and is not placed well to withstand economic slowdowns.

    Interest Coverage ratio

    Interest coverage ratio indicates the comfort with which the company may be able to service the interest expense (i.e. finance charges) on its outstanding debt. Higher interest coverage ratio indicates that the company can easily meet the interest expense pertaining to its debt obligations. In our view, interest coverage ratio of below 1.5 should raise doubts about the company’s ability to meet the expenses on its borrowings. Interest coverage ratio below 1 indicates that the company is just not generating enough to service its debt obligations. Since Suzlon operates with very high level of debt, its current interest coverage ratio is 1.10 and its average interest coverage ratio over the last 4 financial years has been 1.30 times which indicates that the Company may find difficulty in meeting its debt obligations.


    1 Years 29.11% -3.29%
    3 Years 10.51% 38.50%
    4 Years -46.81% 60.03%
    #1 capitalstars05, Oct 7, 2015
    Last edited by a moderator: Oct 15, 2015

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