 "Suzlon eyes 40% market share for FY17")
Wind turbine maker Suzlon, which returned to profitability after bleeding for almost four years, is eyeing a 40 per cent market share this year, up from 26 per cent last year.
Its consolidated net loss narrowed down to Rs 270.55 crore for the quarter ended March 31, on higher sales and lower expenses. For the entire FY16, the company posted a net profit of Rs 482.59 crore, against a net loss of Rs 9,157.69 crore in the previous financial year.
The company is reorienting by venturing into solar power, re-powering its old sites and eying high growth markets like US and emerging markets such as China, Brazil, South Africa, Turkey and Mexico in the next five years.
"Even as the wind sector may seem challenging now, the government's target of achieving 60 Gw of wind power by 2022 is an opportunity for a company like us. We have vast experience and capabilities in execution and new products to meet the demand for higher capacities. Next year, the industry is likely to grow by 30 per cent and Suzlon will grow higher than the industry for the next three years", said Tulsi Tanti, chairman, Suzlon Group.
Suzlon had a 27 per cent share of the market in FY16.
Tanti is confident because of government's ambitious plans to push clean energy. India has a target of installing 100 Gw of solar power capacity and 60 Gw of wind power capacity by 2022. The total installed capacity of renewable energy stands at 30 Gw, of which wind energy projects account for 24 Gw, solar contributes 5 Gw and the remaining comes from smaller sources.
Suzlon, which is the fifth largest player globally, has so far installed 15,550 Mw or 15.5 Gw across the globe, while its installed capacity in the country is 9,500 Mw.
According to Tanti, globally, the demand for renewables is growing with a record 64 Gw installation and an investment of $329 billion during calendar year 2015. The demand for clean, sustainable and affordable power will continue especially in emerging markets.
Explaining the overseas market strategy for Suzlon, Tanti said: "After India, US is the second largest market for renewable energy. Policy stability in US with five year Production Tax Credit (PTC) extension will result in immense growth for wind energy in US. Plus, US has the market potential of 50 Gw, where we have already built and installed 2.7 Gw power. The cost of energy in the US market is affordable. Suzlon is now preparing to enter in the US market by next financial year (FY18)."
According to Tanti, in the next five years the global renewable energy market will grow 100 per cent. It will reach up to $500 billion from the current $300 billion. The company is eying emerging markets such as China, Brazil, South Africa, Turkey and Mexico, where need of energy is very high and cost of energy is a more priority.
Elaborating more on achieving profits this quarter after three years, Tanti said: "We have fixed our capital structure. Our problem was not the business side issue but managing our liabilities. Last year, we sold out some of the assets and infused Rs 7,200 crore in the company. We have raised the equity. We repaid banks more than Rs 7,000 crore. Now, the cash is available for the execution of the projects. Our debt has come down by 50 per cent. Also, We have reduced our per cost per kilowatt-hour (kwh) cost by 30 per cent. After getting the liquidity, withn nine months we doubled the executions."
In February 2015, Sun Pharma promotor Shanghvi and his associates, bought 23 per cent stake in Suzlon for Rs 1,800 crore (then $290 million). Plus, Shanghvi and family agreed to form a 50:50 JV with Suzlon for a wind farm development business. This JV will develop 450 Mw wind farms within a stipulated period of time.
In January 2015, Suzlon divested its German subsidiary Senvion to Centerbridge Private Equity for Rs 7,200 crore. The stake sale of Senvion was in line with Suzlon's strategy to reduce debt and focus on the India market.
