Suzlon Energy’s revenue rose 48% on a yearly basis to Rs 2,103 crore in Q2FY25 and its net profit almost doubled to Rs 200 crore. The company had an order book of 5.1 GW—its biggest ever. JP Chalasani, chief executive officer, Suzlon Group, talks to Raghavendra Kamath about the company’s plans and the issues in the wind energy segment.
Chinese companies are undercutting prices of wind turbines and other equipment to gain business. How do you look at it?
We at Suzlon have a defined customer segment called C&I (commercial & industrial) for whom supply reliability is the most important thing. We have a track record of 30 years. We guarantee for life of the plans. About 54% of our 5.1 GW orders come from this segment. The second segment is public sector. We have an advantage because of our efficiency. We did not bid in the last three-four years because our net worth was low. Since we strengthened our balance sheet, we are participating again. We got a 1,165 MW order from NTPC Green Energy in September this year. The third is, utility type IPP (independent power producers) where we have a significant presence. Chinese competition is increasing, but it is not impacting us.
Despite the rise of renewable energy, thermal is still the mainstay of mitigating power demand in the country. How do you look at it? Will it affect the growth of renewable energy?
They will continue to co-exist. The capacity addition in renewables is much higher than thermal. If we add 500 GW of renewable energy by 2030, in terms of capacity it will be more than 50%, and in generation it will be more than 40%. Thermal and renewable can co-exist. There’s nothing wrong in adding thermal stations if required.
Operation & maintenance (O&M) contributed 97% to your profit and 26% to revenue. How do you plan to grow it?
We have a comprehensive O&M play. We have a book of 15 GW in O&M. We are among the top five O&M operations across the power sectors. It gives 40% Ebitda margins. Every single turbine we sell, the buyers also need to take service contract from us. This is annuity type of a business, it is not cyclical. Out of the 47 GW of installed capacity, we operate 15 GW and 32 GW is of other makes of non-Suzlon. That is a market for us. In addition, whatever has been sold and where the operator is not giving service, that is an opportunity for us. We bought Renom, which is the largest multi-brand renewable energy O&M player. The percentage of O&M in revenue and profit will depend on the wind turbine generators (WTGs) sold. Last year, we did 710 MW and in H1FY25, we did 500 MW. We will do more. With sales of WTGs increasing, the percentage of O&M services will also grow. The percentage of O&M in total profit will change, but it will still be a significant contributor.
How do you plan to ramp up production?
In the current year, out of the order placed, we had a share of 40%. We would maintain that. The current capacity is 3.1 GW. It will grow to 4.5 GW by the end of March 2025. We would spend Rs 400 crore per year as capex in the next two years. Last year, the capacity supplied was 710 MW. It has touched 500 MW in H1 of this year. We will do more. We have an order book of 5.1 GW, which is the highest in our history.