Suzlon reported a Total Income of just under Rs.5400 crores, with an EBITDA of Rs.127 crores & Net Loss of Rs.656 crores. The Total Income was up by about 12% Y-o-Y, which is OK, as Q1 & Q2 are generally the slow quarters and the company does most of the business in the second half of any fiscal. The progress on the profitability front was a bit disappointing. EBITDA margin has improved from 1.82% in Q2 to 2.36% in Q2. I was expecting a bigger improvement in EBITDA margin, it should have been atleast 4% in Q2 and improve to a range of 7% to 10% in Q3 & Q4. Any substantial improvement in EBITDA margins will directly result in a drop in Net Loss numbers.
For the first half of current fiscal, Suzlon has reported a Total Income of just over Rs.10,000 crores. My earlier estimates were that Suzlon will post Total Income for FY'15 at about Rs.25,000 crores, which is still possible or a number close to that. On the EBITDA margin front, my earlier estimates of 7-8% seem difficult to achieve. The First half margins of just over 2% are the main culprit. The reasonable expectation of EBITDA margin for H2 is 7-8%, which will bring the overall margin to about 5-6% levels. The overall EBITDA should translate into Rs.1250 to 1500 crores for the fiscal. The Net Loss for H1 of this fiscal is Rs.1406 crores. For H2, Suzlon is expected to closer to Zero Loss number. Lets see if Suzlon manages to meet these lowered expectations for this fiscal.
On the Valuation front, I am still expecting Suzlon's Fair value to be around Rs.10,000 crores by middle of next year. At this point Suzlon's Equity Capital consists of little over 305 crores. If this number stays the same, then it will translate into a fair value of about Rs.30-32/-. But I am sure that further Equity dilution will happen as soon as the share price moves beyond Rs.15-18 levels. So the Fair value price per share will proportionately reduce depending on the Equity Dilution.
For the first half of current fiscal, Suzlon has reported a Total Income of just over Rs.10,000 crores. My earlier estimates were that Suzlon will post Total Income for FY'15 at about Rs.25,000 crores, which is still possible or a number close to that. On the EBITDA margin front, my earlier estimates of 7-8% seem difficult to achieve. The First half margins of just over 2% are the main culprit. The reasonable expectation of EBITDA margin for H2 is 7-8%, which will bring the overall margin to about 5-6% levels. The overall EBITDA should translate into Rs.1250 to 1500 crores for the fiscal. The Net Loss for H1 of this fiscal is Rs.1406 crores. For H2, Suzlon is expected to closer to Zero Loss number. Lets see if Suzlon manages to meet these lowered expectations for this fiscal.
On the Valuation front, I am still expecting Suzlon's Fair value to be around Rs.10,000 crores by middle of next year. At this point Suzlon's Equity Capital consists of little over 305 crores. If this number stays the same, then it will translate into a fair value of about Rs.30-32/-. But I am sure that further Equity dilution will happen as soon as the share price moves beyond Rs.15-18 levels. So the Fair value price per share will proportionately reduce depending on the Equity Dilution.
No comments:
Post a Comment