• On an empirically strong quarter the operational income excluding other operating income was up by 76% to Rs 3307.48 crore. Strong upside in revenue was largely due to 98% jump in segment revenue of wing turbine generator (WTG) segment to Rs 2837.59 crore. Sharp jump in revenue of WTG was largely due to 80% jump in WTG volume to 462 MW and 9% jump in per MW realization. The segment revenue of foundry was up by 36% to Rs 133.60 crore and that of O&M services was up by 1% to Rs 430.91 crore. The segment revenue of others was up by 2% to Rs 1.92 crore.

• EBIT jumped up by 281% to Rs 606.90 crore. This was largely due to strong 452% jump in segment profit of WTG to Rs 494.54 crore riding on higher sales and higher margin. Segment margin of WTG expanded by 1120 bps to 17.4% largely benefiting from increased capacity utilization and higher realization. The segment profit of foundry and O&M was up by 526% and 34% respectively to Rs 24.03 crore and Rs 95.81 crore. Segment margin of foundry was up by 1410 bps to 18% and that of O&M Services was up by 540 bps to 22.2%.

• Operating profit margin expanded by 490 bps to 22.5% and that is largely due to sharp fall in staff and OE. While material cost as % to sales net of stocks was higher by 90 bps to 58.7%, the staff cost and OE was down by 270 bps and 290 bps respectively to 7.2% and 13.2% respectively. On strong growth in sales and 490 bps expansion in OPM the operating profit was jumped up by 124% to Rs 745.50 crore.

• The other income was up by 89% to Rs 25.44 crore. Thus the PBIDT was up by 123% to Rs 770.94 crore. The interest cost and depreciation was up by 19% (to Rs 339.10 crore) and 12% (to Rs 109.42 crore) respectively. Thus the PBT before forex loss & EO was a profit of Rs 322.42 crore compared to a loss of Rs 37.78 crore in the corresponding previous period. The forex loss down by 61% to Rs 29.18 crore. Thus the PBT after forex loss but before EO was a profit of Rs 293.24 crore compared to a loss of Rs 113.16 crore in the corresponding previous period. The EO expense was nil for the quarter as well as corresponding previous period. Thus the PBT after EO was a profit of Rs 293.24 crore compared to a loss of Rs 113.16 crore in the corresponding previous period.

• Taxation was up by 365% to Rs 1.07 crore. Thus the PAT was a profit of Rs 292.17 crore compared to a loss of Rs 113.39 crore in the corresponding previous period. Share of profit from associate was up by 363% to Rs 16.26 crore. The minority share of profit is Rs 1.57 crore, a fall of 68%. Thus the net profit after MI was a profit of Rs 274.34 crore compared to a loss of Rs 121.84 crore in the corresponding previous period.

• The other comprehensive expense net of tax was Rs 38.17 crore compared to an income of Rs 80.95 crore in the corresponding previous period. Thus the total comprehensive income was a profit of Rs 236.17 crore compared to a loss of Rs 40.89 crore in the corresponding previous period.

Nine month performance

As Senvion was sold effective April 29, 2015, the consolidated financials for the nine month ended Dec 2015 include the financials of Senvion SE and its subsidiaries for one month. Due to this the performance of nine month ended Dec 2016 and corresponding previous period are not directly comparable.

Sales for the period were up by 24% to Rs 7718.59 crore. Higher sales and 540 bps expansion in OPM has resulted in 70% leap in OP to Rs 1502.37 crore. After accounting for lower OI, lower interest and higher depreciation, the PBT before forex loss and EO was a profit of Rs 329.87 crore compared to a loss of Rs 310.75 crore in the corresponding previous period. The forex loss was down by 87% to Rs 44.41 crore. The EO expense was nil for the period compared to a gain of Rs 1346.98 crore crore in the corresponding previous period. Thus on escalated base the PBT after EO was down by 59% to Rs 285.46 crore. The taxation was a provision of Rs 6.01 crore compared to a write back of Rs 14.40 crore in the corresponding previous period. Thus the PAT was down by 61% to Rs 279.45 crore.

Share of loss from associate was up by 79% to Rs 25.35 crore. The minority share of profit is Rs 2.11 crore, a fall of 35%. Thus the net profit after MI was Rs 251.99 crore, a fall of 64%. The other comprehensive expense net of tax was Rs 118.52 crore compared to an income of Rs 71.38 crore in the corresponding period. Thus the total comprehensive income was down by 82% to Rs 133.47 crore.

Order book

Order intake in Q3FY17 is about 557 MW and for 9mfy17 it is over 1GW. Order book as end of Dec 2016 was about 1231 MW (or worth Rs 7523 crore) and of which about 76% is from IPP, 10% from PSU and balance 14% is others.

Management Comment

J P Chalasani, Group CEO, Suzlon, said, "Our Q3 FY17 performance further consolidates the growth we have achieved in the first two quarters with the volumes growing by 31% as compared on a QoQ basis. The domestic market is likely to grow in size, mainly due to the State Feed in Tariff (FIT) programs, Inter State Transmission System (ISTS) with non-windy states, and the demand to meet the Renewable Purchase Obligations (RPO). The competitive bidding process held recently will drive volume growth in the industry. With 14 manufacturing facilities we are the only OEM with blade capacities in all key windy states."

Kirti Vagadia, Group Head of Finance, Suzlon Group said, "We continue to focus on delivering robust growth in volume with enhanced business efficiency. This is reflected in the improved profitability and net working capital despite increasing volumes. Our net term debt has reduced to Rs. 6,538 crores. The sustainability of our turnaround and growth momentum has been validated by an upgrade in credit ratings by CARE to investment grade ‘BBB' from the earlier ‘BBB-' to Suzlon Energy Ltd., and a provisional ‘A-' credit rating to our subsidiary - Suzlon Global Services Ltd."

The stock hover around Rs 17.