Suzlon Energy

man4urheart

Well-known member
Alchemist in simple terms are you mentioning, that if suddenly Mr Tulis Tanti becomes smart and decides to sell REPOWER and Hansen stake and pay back all debt, Suzlon will become market darling! again.

Actually Tulsi should take some cues from his share price that nobody is happy with Suzlon wasting money and time with European acquisitions!

So considering that one can keep a lit bit of Suzlon shares in portfolio.
 

Alchemist

Administrator
Staff member
Alchemist in simple terms are you mentioning, that if suddenly Mr Tulis Tanti becomes smart and decides to sell REPOWER and Hansen stake and pay back all debt, Suzlon will become market darling again.
I am not sure.

I did some rough calculations and my estimate is that even if Suzlon sells REpower and Hansen, it would still be left with some debt and a business that is making losses at operational level.

I will relook at my estimates and post again tomorrow.
 

man4urheart

Well-known member
You are right Alchemist. The fortune of this company is tied to Crude Oil. Until crude is back up to 100, Suzlon core business of Wind turbine wont get boost.

The input raw material costs are also high!

They are making hefty loss even at standalone levels, with debt and so much diluted equity. Since there are no profits you cannot put value to the company.

In fact this year losses have actually even eaten all reserves or profits from earlier years!

Having said that I am still trying to think out of box, Let's say we fire Tulsi Tanti and let a new IIM Ahmadabad graduate or Harvard graduate or say Warren Buffet sit as chairman and ask him can we turn around this company. What steps he will take to make Suzlon profitable?

Any ideas that suzlon will be in business (what is point to be in business when you cannot make profits) and can create share holder value or will keep posting losses for next 1-2 years?

Suzlon has lost pricing power? They cannot sell their products more than what they cost to produce?

Looks like Suzlon first needs to reprice their rates for their orders, else should not be selling turbines.
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Suzlon has also sewn web of convertible bonds, which means there is a planned dilution of equity by 2014. A further cut in share price, due to more supply of shares.

I think which Suzlon will make sure to force all convertible investors to convert at price in market of Suzlon at that point of time to wipe debt off its balance sheet.

This means in any case, Suzlon will have interest burden till 2014 and then diluted equity there after!
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This fairly explains, Suzlon is not a good investment even at such low prices.

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Can somebody do a takeover of Suzlon? Like we had rumor of Reliance?

Studying the company, I don't know why would anybody like to take a stake in Suzlon?
 
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Alchemist

Administrator
Staff member
Can somebody do a takeover of Suzlon? Like we had rumor of reliance?

Studying the company, I don't know why would anybody like to take a stake in Suzlon?
If the promoters of Suzlon are willing to sell their stake, they will get more than fair value for their stake.

Suzlon is the third largest wind turbine company in the world.

Moreover, it owns two very good assets - REpower and Hansen

I am sure the existing promoters can easily find a new owner for Suzlon.

All sectors go through a bad patch. Energy and alternate energy sectors will turn around sooner or later.

The problem with Suzlon is that the current promoters don't have deep pockets.

If the new promoter of Suzlon is a large company like Reliance Power, L&T, RIL, Tata Power etc, Suzlon won't only survive this bad phase, but will actually emerge as a very strong company.
 

man4urheart

Well-known member
Ok million dollar question how to estimate where to buy ?

There sales have halved, which means neither business has margins nor we getting sales.

Interestingly sales are at 2006 levels and they in fact made profit in 2006.

Year 2006

Sales = 3788 crores
Profit = (821 crores)
Interest cost=(60 crores)
administrative cost=(60 Crores)

and loss today

Year 2010
Sales = 3504 crores
Profit/loss = (-1410 crores)
Due to high interest costs = (734 Crores),
Administrative costs = (557 Crores)

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What you say is Reliance/TATA will come in and introduce cash in company, wiping interest costs and fortunes can change?

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Where can one buy? Should we buy small quantities? Mr TATA or Ambani is going to come and rescue the debt burden?
 
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Is there any recommendation about Suzlon Energy?

It's hovering at a low price for quiet a long period of time now.

If we see 52 wk period then it has come down from 93 to 55.

One more thing- is the ownership patterns can be a concern while buying any stock. because if we look at the ownership pattern of this company, then about 65% of stock is held by promoter and rest remains with DII's FII's and public.

Kindly advise,

Source::BSE India.
 

ams

New member
Today at 57.55.

Been dealing in this stock for past two years. Just when I started dealing in the market. Have posted sizable loss in this.

But still I believe that the company is in renewable energy sector and has good potential. All that it needs is one chance :egg:

I am still holding on some shares.
 
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I will relook at my estimates and post again tomorrow.
Alchemist, please have a look at this when you have time. The best time to buy is when everyone thinks it is not.

Can somebody do a takeover of Suzlon? Like we had rumor of Reliance?
Did you mean Reliance wanted to take over Suzlon? Or that someone wants to take over Reliance (if such a thing is even possible)?
 

magnet

Active member
Why such beating for the stock?

Quarterly report was better than last year with 19 crore loss compare to 90 crore.

Also block deal at low price is enough reason for beating of stock.
 

San Yad

Active member
Did you mean Reliance wanted to take over Suzlon? Or that someone wants to take over Reliance (if such a thing is even possible)?
If reliance needs rescue then India story is finished I think.:D.

It must be other way round but I also don't have any fresh news of Suzlon too.

Happy Investing!
 
Suzlon Energy?

I purchased SUZLON at 30.20 today.
Is this stock a good pick?
As I understand the stock had reached a bottom of around 18 from near 400.
Since the stock was rising recently and I think wind energy is having future in India but may take time to reach good levels.

Kindly advice.
 
I purchased SUZLON at 30.20 today.
Is this stock a good pick?
As I understand the stock had reached a bottom of around 18 from near 400.
Since the stock was rising recently and I think wind energy is having future in India but may take time to reach good levels.

Kindly advice.
Analysts are divided on this stock on a fundamental basis. The news flow and its impact is not clearly understandable for laymen investors like us. Having said that, this is a volatile stock. So invest only the amount that you are willing to risk in this stock.

One way to save your capital would be to use stop loss for this stock.
 

magnet

Active member
Suzlon bought Re power from areva and became the world's largest company in terms of wind energy. But it is facing problem to restructuring its debt which is worth 11000 crores and they have to pay around 1800 crore sum in June this year.

Now they have got offer from Alstom to buy full 100% stake in Repower for around 1.2 billion sum. I guess somewhat 9000 crore.

But analyst are here divided whether deal happens or not. And whether that will solve issue in this company or not.

I would love to see the whole suzlon getting sold to someone who have a deep cash chest someone like reliance.

For long term i'll definitely love to have 2% stake of my portfolio in this company. But i don't feel any positive outcome will happen until 2015.

Note::I hold 50 shares at somewhat 47 rupees from past 2 years right now.
 
Since the stock was rising recently and I think wind energy is having future in India but may take time to reach good levels.

Just because wind energy has a future does not mean you should invest in any company in that sector.

The fundamentals of the company are not good, check this out.

Suzlon - Fundamental Analysis
 
The bond holders rejected for the extension of FCCB which was demanded by Suzlon Energy.

Now SBI high official told that Banks to consider the debt recast. Already the banks NPA keep rising (KFA) on the other hand they want to help others. Do share your views.
 

magnet

Active member
Things seems to be improving for Sulzon. It has restructured its local debt and there is order flow.

Is it worth a buy at CMP of 22?
Debt problems haven't gone. It's just that for time being it's gone in a box. New shares will be issued for debts I guess. For time being it looks safe. But a company from three digit almost going near single digit I won't recommend.

Personally have it in 2 folios between 40 rates and looking for exit.
 
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