Suzlon Q1 net dips 93% on sale reversal

CORPORATE SCORECARD

Suzlon Energy, the country’s biggest maker of wind-turbine generators, said first-quarter group profit declined 93 per cent after currency losses and a sale reversal. Net profit fell to Rs 1.35 crore in the three months ended June 30 from Rs 18.89 crore a year earlier, the company said.

Revenue increased 43 per cent to Rs 2,834 crore. “Reversal of sales is clearly an issue,” said Krishnakant Thakur, Mumbai-based analyst at Edelweiss Capital, who recommends customers buy the stock.

“Although Suzlon seems to have shown good volumes even at such a lean time, it’s not good news if customers keep reversing sales.’’

Billionaire Chairman Tulsi Tanti’s Suzlon has been dogged by concern that blade defects may prompt customers to cancel orders. Last month, a unit of Southern California power company Edison International declined to take delivery of 150 turbines after complaining that it received faulty equipment, Suzlon said.

“Unresolved issues” at a South Korean customer’s site led to a reversal of sales of Rs 65 crore, which cut first-quarter profit by Rs 11 crore, Suzlon said.

The sale of seven wind turbine generators of 2.1 megawatts each to the South Korean customer was accounted for in the previous year, the company said in the e-mailed statement. Suzlon made a currency loss of Rs 164 crore in the quarter.

The company has set aside Rs 590 crore to compensate customers for cracked blades, Chief Financial Officer Kirti Vagadia said. Suzlon said orders in hand are worth Rs 16,490 crore.