I had posted a T-T-M comparison report between Suzlon Energy & Inox Wind a couple of months back based on the numbers available till Q1-FY17 (Click here for that report). The situation was clearly in favour of Inox Wind at that point. Coming to Q2-FY17 numbers announced recently, Inox Wind announced came out with substantially improved performance compared to Q1, but was still short of it's Q2-FY16 numbers. On the other hand, Suzlon Energy came out with numbers that can be termed as 'stupendous', especially the EBITDA & margin numbers, which also helped the company to post healthy Cash & Net Profit numbers for the quarter. While EBITDA margins were expected to be in the 14 to 18% range, Suzlon's Q2 numbers reported an EBITDA margin of almost 23%!! Suzlon's Q2 numbers have had a terrific impact on the company's T-T-M numbers. Hence it's prudent to see how the two companies now fare at the end of Q2-FY17.
At the end of Q1-FY17, Inox Wind's T-T-M Total Income was 49.5% of Suzlon's figure, which is now down to 42.3%, because of Suzlon's much stronger Y-o-Y performance in the latest quarter. On the T-T-M EBITDA front, Inox Wind's number was 74.5% of Suzlon's number last quarter, but now it is just 46%. The huge gap in EBITDA margins of the two companies on T-T-M basis has now been closed substantially. Suzlon's T-T-M EBITDA margin now stands at around 15.5% compared to 16.8% for Inox Wind. Now the big question is whether the 23% EBITDA margin posted by Suzlon Energy for Q2-FY17 is sustainable or was it due to some one-off event. We will come to know about it only after Q3 numbers are posted.
Coming to the Interest Cost of the two companies, this is the only part where Inox Wind's figure has maintained the same percentage over the previous quarter. Inox Wind's Interest Cost continues to be just under one-tenth of Suzlon Energy's Interest Cost. Interest Cost continues to be a pain point for Suzlon Energy. With a stupendous EBITDA performance and strong Cash Profit figure during Q2-FY17, there is a possibility of the company's Interest Cost showing decreasing trend in the coming few quarters. Thanks to the sharp jump in it's EBITDA, Suzlon Energy was able to post a decent positive T-T-M PBDT number this time, bridging the gap to Inox Wind considerably. Inox Wind's PBDT continues to be higher by a good margin, but the gap is now down by more than half of what it was at the end of the previous quarter. Market Caps of the two companies continue to maintain about the same proportions compared to what it was 2 months ago.
Other factors: From the above numbers, it is quite obvious that during Q2-FY17 Suzlon Energy has clawed back a major chunk of the advantage that Inox Wind held over it. But there is one small troubling factor for Suzlon Energy. During Q2-FY17, the company's Order Book dropped by over 100 MW, from levels of 1200+ MW to around 1100 MW. On the other hand, Inox Wind's Order Book expanded from 1100+ MW to over 1300 MW. Suzlon Energy's sales team will have to work harder to keep it's production & execution teams busy in the coming few quarters. On the other hand, Inox Wind's management has continued to exude confidence of achieving a Turnover of between Rs.5000 to 5500 crores for the current fiscal, despite the fact that the company's H1-FY17 turnover is lower than that of H1-FY16 by around 25%. Inox Wind will have to post a growth of 35 to 40% during the second half of this fiscal to achieve it's targeted turnover. They have enough orders in hand and that is probably where the management is getting it's confidence from. Let's wait & watch for Q3 numbers, which should be announced in February'17.
Coming to the Interest Cost of the two companies, this is the only part where Inox Wind's figure has maintained the same percentage over the previous quarter. Inox Wind's Interest Cost continues to be just under one-tenth of Suzlon Energy's Interest Cost. Interest Cost continues to be a pain point for Suzlon Energy. With a stupendous EBITDA performance and strong Cash Profit figure during Q2-FY17, there is a possibility of the company's Interest Cost showing decreasing trend in the coming few quarters. Thanks to the sharp jump in it's EBITDA, Suzlon Energy was able to post a decent positive T-T-M PBDT number this time, bridging the gap to Inox Wind considerably. Inox Wind's PBDT continues to be higher by a good margin, but the gap is now down by more than half of what it was at the end of the previous quarter. Market Caps of the two companies continue to maintain about the same proportions compared to what it was 2 months ago.
Other factors: From the above numbers, it is quite obvious that during Q2-FY17 Suzlon Energy has clawed back a major chunk of the advantage that Inox Wind held over it. But there is one small troubling factor for Suzlon Energy. During Q2-FY17, the company's Order Book dropped by over 100 MW, from levels of 1200+ MW to around 1100 MW. On the other hand, Inox Wind's Order Book expanded from 1100+ MW to over 1300 MW. Suzlon Energy's sales team will have to work harder to keep it's production & execution teams busy in the coming few quarters. On the other hand, Inox Wind's management has continued to exude confidence of achieving a Turnover of between Rs.5000 to 5500 crores for the current fiscal, despite the fact that the company's H1-FY17 turnover is lower than that of H1-FY16 by around 25%. Inox Wind will have to post a growth of 35 to 40% during the second half of this fiscal to achieve it's targeted turnover. They have enough orders in hand and that is probably where the management is getting it's confidence from. Let's wait & watch for Q3 numbers, which should be announced in February'17.
No comments:
Post a Comment