Suzlon Energy

ams

New member
#1
Hi Alchemist,

Can you please comment on future of Suzlon?

What's your call on current levels of around 300?

What percentage of portfolio should be spent, if at all on this stock?
 

San Yad

Active member
#2
Hi

Can anyone suggest about Suzlon energy ? Is it a good idea to dip in at about 180 to 190 Rs?

Please suggest!

Happy Trading!
 

man4urheart

Well-known member
#3
Corrective rise is due



- Its is trending down nicely.
- Confirmed by 50 EMA (blue line) downwards!
- Buying spike at bottom is shown!
It will not fall further and a pull back to upper channel line of downward trend or 50 EMA is due in coming weeks!
- Target 230 - 240 medium term, but since overall trend is down, Shorts will be high probability trade rather than buying!

I am personally not buying anything. Will wait for Corrective rise to get over to decide on fresh shorts!
 

San Yad

Active member
#4
Man4heart!

I think Rs 180 is the support level for suzlon now.. If it falls below that then how far back it can go?

Can we see the chart and analyse again for fresh entry?

Thanks
 

man4urheart

Well-known member
#5
Well broadly chart has 2 scenario's



1 - We respect the channel and head towards bottom blue line of downward channel!
2 - We respect our earlier low(Pink Line) and bounce from there!

Case 1 appeals and is strong case

- As 50 EMA and 200 EMA are in most bearish orientation
- 50 EMA is below 200 EMA!
- MACD has negative momentum building up!
- RSI is still not in oversold zone!

Fundamentally

It has same issue as TATA Steel with CORUS

FY 2007-2008 Crores

Standalone

Sales= 7051
Expenditure = 5544
Profit = 1265

Consolidated including RE Power

Sales = 13943
Expenditure = 12576
Profit = 1030

As a standalone Suzlon was doing great, but with RE Power, Sales doubled, Expenditure Doubled and Profit down by 15%

With correction of OIL, I think alternate energy scenarios are not appealing to world any more. On top of it we have recession looming on our heads!
 
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#7
Can anybody explain me why is it dipping at such a low level?

Also, there is a company announcement of "Suzlon Energy Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on September 27, 2008 to consider the proposal to undertake a rights issue of its equity shares to an extent of Rs 1800 Crores".

What will be the impact of it on the value of the stocks?

Pramod
 
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ramkasi

Active member
#9
Unitech and suzlon are down on news but suzlon could be good buy if it is accident that he blades are cracked if only they insured them.

ram
 
#11
suzlon an EXIT??

Hi Alchemist,
Now that suzlon has reached 45 re levels....what is your call on this?? An EXIT at any price below 40? Further, the fact that the profit is down 95% from it's last year's profit, this is also bound to hurt it a lot, right?? Let us know of your views on this.
 
#12
Hi there, I dont know about results of suzlon but today I was just reading National Post (canada) and it was asking canadian wind turbines companies to gear up to fulfill US energy demand as it is going to explode in coming years. So I think Suzlon will be biggest benificiary as it already has presence in US.
 

man4urheart

Well-known member
#13
Suzlon Yearly analysis

Alchemist, I have done detail analysis on Suzlon, but need somebody to verify my calculations

As per MAR 2008 consolidated annual results

Working Capital for Suzlon = Current Assets -Current Liabilities = 26388- 17436 = 8952 Crores.

Thus, Working capital/Sales = 8952/13679 = 65% which is very healthy!

sales = 13679 crores
Inventory = 4084 crores
Inventory turn = 108 days! which I am still to calculate for peers!

Total Shares Outstanding = 1498338894

I will buy it absolutely free if I pay = Working Capital/ Shares outstanding = 59 it is rare to get a company at this price

Debt to Equity = 125%...this is a major issue. Too much debt but current ratio and Quick ratio are healthy at 2.4 and 1.8 resp

Finally I calculated Book Value = Total Assets - Goodwill and intangibles = 26388- 1392- 30 = 24966 crores

Book Value per share = 167(Consolidated)

Stand Alone = 83(standalone)


I think it is pretty safe to buy Suzlon at current price seeing the book value and Working Capital Position!

------------------------------------------------------------------

It reported 17 % increase in Profit at yearly consolidated basis with working capital of 8000 crores!

This means it will need another 8000 crores to double it's profits!

-----------------------------------------------------------------------

Cash flow from day to day operations for 1244 crore which is 20 % of total cash in hand!

It grew it net cash from 1538 to 6960 crores by issuing bonds for 2000 Crores (additional Debt) and new shares for 2660!

That means most of cash came from loans and issuing shares!

Finally interest coverage ratio is at 1.7, which makes this loan as of now safe!

Any fall in earnings next year can bring this ratio below 1.5 , making it a risky investment.

All said and done, I think suzlon will improve its status on cash and debt by decreasing same in coming years!

But with risk of falling earnings, does defaulting on Debt a possiblity next year?
 
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Alchemist

Administrator
Staff member
#14
Selling pressure is still there in Suzlon Energy and this makes me a bit worried.

Unlike Unitech, the stock hasn't shown any recovery.

Unitech (48.85) is 57% above its 24th October close of 31.

Suzlon (45.8) is actually below its 24th October close of 47.10. The volumes are high too. The selling hasn't stopped.

I am still trying to figure out what is bothering the market so much.

Is it the blade-breaking incident or something else?
 

man4urheart

Well-known member
#15
What I can interpret from Quarterly results is that they have done 2 very bad quarters.

They didn't even made enough money on their debt to cover their interest expenses!

I just had a quick look at RE Power. It also had made losses in line with Suzlon Quaterly results!

In Short Financial year 2008 Jan - Mar 2008

Sales Dipped from 67 Crore Euro's to 15 Crore Euros!

There inventory turn around ratio was 358 Days, which expalins the low sales!

Profit 2 Crore Euro's to 0.1 Crore Euro's...Pathetic!

Now in Last Quarter Q1 2009

Inventory turn around ratio of 265 days!

Sales improved as well as Profits improved!

But finally they have negative cash flow from operations of 8 crores Euro's

Which results in NET cash decrease from 17 Crores to 7 Crores!

Q2 is due , looks like there is big surprise coming!
 
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Alchemist

Administrator
Staff member
#16
Today, there is some buying in Sulzon.

I bought a few shares @ 48.30 for delivery.

It's a small quantity....not in mood to bet heavily against the market.
 

man4urheart

Well-known member
#17
Today, there is some buying in Sulzon.

I bought a few shares @ 48.30 for delivery.

It's a small quantity....not in mood to bet heavily against the market.

What was that small quantity...man you bought the whole market!:D

Good one we bought it for free at working capital a rarest chance to pick this stock at such a low price....

What a rise of devil!

I also averaged mine at 46 last week!
 
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Alchemist

Administrator
Staff member
#18
What was that small quantity...man you bought the whole market!:D

Good one we bought it for free at working capital a rarest chance to pick this stock at such a low price....

What a rise of devil!

I also averaged mine at 46 last week!
This morning when the entire market was going down, Suzlon was going up with exceptional volume.

When a weak stock shows such strength, it deserves to be bought..:D.

Today's volumes were exceptionally high - even higher than 24th October when the stock was down 40%.

There was strong selling today too, but the buying was even more stronger and hence the high volume.
 

Alchemist

Administrator
Staff member
#19
Yesterday's delivery volume (NSE) was even more than that on October 24th.

The selling refuses to stop.

Date Delivery Volume

01-Oct-08 03,359,538
03-Oct-08 03,053,084
06-Oct-08 02,200,935
07-Oct-08 02,191,695
08-Oct-08 05,602,937
10-Oct-08 03,338,003
13-Oct-08 03,639,366
14-Oct-08 03,091,251
15-Oct-08 02,210,944
16-Oct-08 07,643,628
17-Oct-08 05,461,281
20-Oct-08 02,964,460
21-Oct-08 03,810,061
22-Oct-08 01,012,543
23-Oct-08 02,320,284
24-Oct-08 21,995,302
27-Oct-08 12,412,709
28-Oct-08 02,748,679
29-Oct-08 10,606,646
31-Oct-08 11,855,774
03-Nov-08 11,683,644
04-Nov-08 16,640,711
05-Nov-08 22,162,838
 
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