Suzlon Energy shares tumbled to a record low of Rs 16.10 on NSE on Tuesday, after the wind turbine maker reported a huge loss of Rs 849 crore in the first quarter, much higher than the Rs 300 crore loss in Jan-March and profit of Rs 60 crore in the year ago quarter.
"This has been a disappointing first quarter. The macroeconomic environment, policy uncertainties in some markets, along with other external factors such as the depreciating rupee continue to impact us," Tulsi Tanti, Chairman said in a statement.
The company's revenue in April-June was up 10% year-on-year to Rs 4,747 crore and it has an orderbook of USD 7.2 billion.
"Our core business fundamentals remain sound -- high gross margins, strong and firm orderbook and high turbine availibility -- and we are embarking on a robust programme, project transformation, to reduce annual opex and manpower cost by 20% by the end of the year. We have also made it a priority to strengthen our balance sheet significantly by deleveraging in India. This will be a defining year for Suzlon Group, even as our sector continues to face a number of challenges," Tanti added.
However, the street was not impressed by his "cautiously optimistic" outlook.
"Except for revenue, other numbers were much below our and market expectations. Net loss was over 6 times our and consensus estimate
range of Rs 120-130 crore...Though Suzlon has not cut its FY13 guidance (revenue between Rs 27,000-28,000 crore and an EBIT margin of 6%), we
expect guidance downgrade post the first half results...We see an increased downside risk to our numbers based on Q1 performance and tougher market conditions ahead," said Charanjit Singh and Jenny Cosgrove of HSBC.
The analysts further added that Suzlon remains highly leveraged with net debt to equity ratio of 2.9 times as of June 30 and there are debt repayment risks in FY13 and FY14.
HSBC has maintained its "underweight" rating on Suzlon, with a target price of Rs 10 on the stock.
At 10:50 hrs, Suzlon shares were at Rs 17.20, down near 3% from previous close.
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