Suzlon’s shares rallied in the past year. What do you attribute this to?
The answer is investor confidence. But the confidence is coming due to two reasons. One, we had an issue with respect to high opex (operating expenditure). Our fixed costs and debt were very high. So, our interest cost was Rs 100 crore a month. Secondly, the sector went down after FY17. In FY 17, we did 5 gigawatts, but subsequently, we’ve been struggling. However, internally, we fixed both-the opex in 2019- 2020, and now we are debt-free. Now we have huge internal accruals coming from our services business. The order book has been significant, especially for 3MW wind turbine generators (WTGs). The sectoral tailwinds are strong, wind energy is picking up significantly.So what entails the next growth phase for Suzlon?
We do have a significant manufacturing capacity. We can manufacture 3-4 GW a year. Our ability to deliver larger volumes is significant now. We closed the last quarter with an order book of 1. 6 GW and subsequently, we have announced several orders. In fact, 50% of our order book is from the commercial and industrial segment. These things make us believe that our numbers and delivery will be strong.
You were Suzlon Energy’s CEO between 2016 and 2020. Whatis being done differently this time to improve Suzlon’s performance?
In 2017, we did close to 1800 MW. We had a 30% market share. But then bidding norms changed and the volume significantly dropped. The whole country did 1500 MW in FY18. And we are struggling since then to now between 1500 MW to 2000 MW. When volumes were low, we being a vertically integrated company, our fixed costs were high. Now we need to bring agility back into the organization. This is a built-up year for us to deliver in a big way FY24 onwards.
Where do you see Suzlon in 3-5 years?
Continue to be a market leader in India and significantly growing YoY from FY24 and FY25. We can become a total solutions provider of energy management systems. Moving ahead, you’re going to have wind, solar, and storage working together as a single project. So, can we provide a total solution for it? And then can we look at international in 3-4 years? So effectively being number one in India and then one of the top manufacturers globally is what I look at in the next three to five years. More importantly, we will insulate ourselves from being a cyclical organization so that we constantly keep growing.
