Suzlon Energy Ltd (SUZLON) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Suzlon Energy Limited Q2 FY27 earnings conference call. During this call, the company management may make certain statements that reflect their outlook for the future, which could be construed as forward-looking statements. These statements are based on management's current expectation and are associated with uncertainties and risk, as detailed in the annual report. Actual results may differ, so these statements should be reviewed in conjunction with the risk the company faces. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. We will begin with the opening remarks followed by a Q&A session. To be fair to others, we kindly request each participant to ask no more than two or three questions. From the management, we have with us Mr. Ajay Kapur, Group CEO, and Mr. Rahul Jain, Group CFO, and senior members of the finance team. I now hand the conference over to Mr. Ajay Kapur. Thank you and over to you, sir.
Ajay Kapur (Suzlon Energy Ltd): Thank you. Good evening, everyone. And thank you for joining Suzlon's Q2 FY27 earnings call. Let me start by talking about the industry. This year marks a significant inflection point for India's wind energy sector. The industry has moved beyond proving its relevance and is now increasingly being recognized as a strategic pillar of India's energy security, manufacturing growth, and decarbonization agenda. During the quarter, India crossed 59 GW of installed wind capacity, while maintaining one of the world's largest and most indigenized wind manufacturing ecosystems. The focus is on building a resilient domestic industry capable of supporting India's long-term energy ambitions and emerging as a global export hub. Green Energy Corridor phase 3 approved by the Cabinet recently is a significant step towards strengthening intra-state transmission infrastructure, enabling evacuation of up to 135 GW of RE capacity. This long awaited industry demand enhances transmission readiness, reduces evacuation risks, and provides greater certainty for project execution, supporting India's target of 100 GW wind and 300 GW solar capacity by FY30. Equally encouraging is the strength of the industry's execution pipeline. With over 40 GW of projects under various stages of implementation, annual manufacturing capacity exceeding 20 GW, wind equipment exports have emerged as a major growth opportunity, with exports exceeding 12,000 crores in FY26, demonstrating India's growing global competitiveness. Big momentum is also gaining traction, with almost 8 to 9 GW of wind, RTC, FDRE, wind dominated tenders being awarded in H1 FY27. C&I pipeline also stands robust. This sets the stage for a multiyear growth cycle, with annual installations expected to cross 10 GW in the near term and reach 15 GW by FY31. Overall, the convergence of energy security, prioritizes manufacturing strength, repowering opportunities, offshore wind development, transmission expansion, and rising power demand provides strong visibility for a sustained multiyear growth cycle for the Indian wind sector. Now taking you through the quarter 2 FY27 business highlights. Suzlon delivered 710 MW in quarter 2, with 40% jump quarter-on-quarter, making our ever-highest second quarter India deliveries. This performance was achieved despite quarter 2 seasonally being a lean quarter on account of monsoon. The most salient achievement for the quarter was in terms of commissioning, wherein Suzlon installations grew more than 69% from 269 MW to 454 MW in quarter 2 FY27. Talking about half year, H1, the installations reached 723 MW. Further, 1.25 GW
Ajay Kapur (Suzlon Energy Ltd): erected erected turbines in pipeline for future commissioning will pave the way for uptick in the commissioning going forward. Our order book of 6 GW reaffirms our market leadership. In H1 '27 in H1 '27 we have already secured 1.5 GW of orders and continue to have strong pipeline. The current order backlog provides coverage for 18 months, and healthy order pipeline gives strong confidence and comfort for maintaining the growth momentum. Order book is not constrained with strong demand in industry and DEVCO model offering in place to help keep momentum growing. Our focus remains on closing quality orders at regular intervals rather than achieving quarterly run rate. With the 175 5X and 163 6X, Suzlon is expanding its technology portfolio with high capacity turbines that deliver superior yields, better reliability, and lower LCOE unlocking opportunities across repowering and new build projects worldwide. 4.5 GW manufacturing capacity fully operational, expanding footprint with three AI-enabled smart blade factories to drive efficiency and scale. Suzlon 2.0 is translating into a tangible growth opportunities across multiple adjacencies. Our RETech successfully commissioned the proto of first S175 5 MW turbine, and secured the first customer order of 21 turbines of 105 MW. Our DEVCO shows a strong market acceptance reflected in 900 MW of orders already booked in H1 '27. On exports we are seeing good traction with customers expected to receive orders in the next few quarters. With respect to integrated offering in terms of FDRE, we are in active discussions and finalizing the terms with prospective partners. Suzlon 2.0 is a 5-year journey and I'm personally satisfied with the progress made so far. Our REAMS India business remains strong with one with 16.5 plus GW of installed base with EBITDA margins maintained north of 40%. Our Foundry and Forging continues to scale strongly in Q2 delivering revenues of Rs. 167 crore and EBITDA of Rs. 50 crore, with continued momentum driven by domestic demand and export growth. Now I'll invite Rahul Jain, our Group CFO, to take you through our financial performance. Rahul?
Rahul Jain (Suzlon Energy Ltd): Thank you Ajay. Good evening ladies and gentlemen. I would be using slide 18 to 27 of our investor presentation which has been uploaded on our website as the reference point for my discussion during this presentation. [cough] In Q2 FY27, revenue grew 27% Q-on-Q to Rs. 4,869 crore from Rs. 3,819 crore in Q1 FY27. EBITDA improved to Rs. 720 crore up 21% from previous quarter. Profit after tax stood at Rs. 394 crore, up 29% from Q1 FY27. The company has delivered strong sequential growth on key financial parameters. When compared on Y-o-Y basis consolidated EBITDA percentage has been impacted on account of below. Decline WTG contribution margins from 26.9% to 21.2% primarily due to segment customer segment customer and scope mix changes and additionally forex and commodity volatility making it a key driver of the EBITDA margin decline. We are working on several levers to optimize the impact in the near to medium term. Operating expenses increased by about Rs. 80 crore during Q2 FY27 versus Q2 FY26 largely led by higher Suzlon 2.0 related branding, travel, SG&A related to associated cost which are around Rs. 50 crore. This is expected to be phased down in subsequent quarter. This non-recurring expense had an adverse impact of around 1% on EBITDA margin. In H1 H1 FY27 deliveries grew 21% Y-o-Y to 1,217 MW from 1,009 MW in H1 FY26. While commissioning
Rahul Jain (Suzlon Energy Ltd): to 723 MW from 270 MW, a significant jump of 168%. Revenue grew 24% YoY to INR 8,688 crores, with EBITDA at INR 1,315 crores. PAT for H1 stands at INR 699 crores. Last year, Q2 and H1 PAT included significant DTA recognition benefits, making the reported numbers not directly comparable. In contrast, the current year's PAT is largely impacted by DTA reversals, which are non-cash in nature. Hence, for a like-to-like comparison, PBT is a better metric to compare. Coming to the balance sheet, we are pleased to report on our balance sheet as of September 2026 reflects a position of exceptional strength with consolidated net worth crossing 10,000 crore mark to INR 10,277 crores. Our net cash position at INR 2,048 crores further enhances our financial flexibility and resilience. Adequate working capital limits tied up for execution of the current order book are also in place. Our net working capital looks higher primarily due to seasonality and us gearing up for higher volumes in H2. You would be pleased to know that CRISIL has elevated our long-term rating to AA- Stable, and the short-term rating has been upgraded to A1+. I believe that an integrated business model backed by a robust supply chain, strong execution capabilities, and industry-leading service network continues to differentiate Suzlon and create a sustainable competitive advantage. With that, I would now like to hand over the call to the operator and open the floor for questions.
Moderator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press "*" and "2". Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Sumit Kishore (Axis Capital): Good evening. Thanks. Two questions from my side. The first one is if you could elaborate on your comments around the depressed contribution margin of 21.2% in Q2. And also, till what time will the higher fixed expenses in WTG business continue? So, you mentioned a 50 crore number on branding, travel, SG&A this quarter. So, I mean, what what kind of a hit should we expect or impact should we expect in coming quarters? And so, what should be your normalized or or when would the operating leverage benefit with growing volume start reflecting in numbers? That's my first question.
Rahul Jain (Suzlon Energy Ltd): Thank you, Sumit. I'll take the question. The contribution margin, the part of the margin impact is attributable to high volatility in FX and commodities, which is largely, I would say, due to the West Asia crisis. Now, when we think about it, this is a crisis that has been ongoing and all of us have been hoping that some of this should get sorted out. It is difficult to predict the timing of this resolution, given the nature of the externality. Any such resolution should normalize this impact. Again, like I said in the opening remarks as well, we are working on several initiatives to normalize the impact as well and optimize COGS, which should address part of the part of this issue. WTG contribution margins are expected to remain in that 22-23% range for FY27 is the the belief and it should get normalized subject to some of these externalities getting normalized. I hope that answers it, Sumit.
Sumit Kishore (Axis Capital): How much is the FX impact?
Rahul Jain (Suzlon Energy Ltd): See, again, it is difficult to be able to in, let's say, articulate it, but I would say, when we think about it, a commodity and FX impact put together has about a 50 basis point impact.
Sumit Kishore (Axis Capital): Okay, and on the fixed expenses?
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