Mr Sumant Sinha Chief Operating Officer of Suzlon Energy during an interview with CNBC TV 18 said FY10 would be a tough year for the company.
He expects sales to be skewed towards the second half of the year. He said that "The budget only came out at the end of Q1 or beginning of Q2 so a number of Indian orders got pushed into this second half of the year. Also, a number of our overseas clients has asked for deliveries in the second half of the year."
He said that "Suzlon was looking at rationalizing its debt and the company would soon see a clearer capital structure."
On the Hansel sale, he said due diligence for the same was still in progress.
Q - Before I talk about the fundamental developments in the wind power business which has been quite positive internationally, just one quick clarification on the September end debt governance which are coming up- There has been a promoter stake sale recently which you guys are fully covered on meeting those debt governance.
A - I cannot comment on that at this point of time. When our numbers are declared on the October 30, we will address the issue then. I think the promoter stake sale that you referred to earlier was for very different purposes and has nothing to do with the debt governance issue per se.
Q - Just a quick clarification on the Hansen sale on which we have not heard for some while is due diligence still on or is the process still on?
A: Yes it is still on. Unfortunately we do not have anything more specific to report at this point in time. I do recognize the fact that the process has been going on for sometime but you have to recognize that this is a London Stock Exchange listed company domiciled in Belgium and so there are multiple jurisdictions that we have to look at. Hence the process is taking a little bit of time.
Q - What about the demand environment as well? We heard that deliveries were getting pushed back for FY10-FY11. Would you have to re work or re look at your volume targets for both these years?
A - We consistently maintained that this year is going to be a difficult year for us compared to last year. We talked about volume guidance being 10% to 15% lower. In addition to that we have also said that our sales this year is going to be back ended and therefore typically we see a 35:65 spilt between H1 and H2. This year that split is likely to be more skewed and that is on account of number of factors. For example, in India the budget only came out at the end of Q1, the beginning of Q2 so a number of Indian orders got pushed into this second half of the year. Number of our overseas clients has asked for deliveries in the second half of the year. Therefore it is really a more skewed sales profile that we have this year. With regard to next year we are a lot more bullish because the market looks like it is coming back. We are seeing pick up in orders certainly in the Indian market which is fairly important market for us and we have about 55% to 60% market share here.
So we are seeing a significant pick up in the Indian market. The rules or the guidelines that surge are now talking about and the kind of discussions that are happening at the prime ministers level. So there is a lot of optimism that India will see a much more substantiated growth in the years to come. The Indian market certainly is going to be a lot more positive, really going forward this point onwards and certainly a lot better from next year onwards once these guidelines actually come into play. With respect to the international market there are really fair good signs as well. We are seeing order pick up in different markets. Financing which is a very important aspect for customers is coming back to the markets. The reason being that banks are coming back into the market with project financing, in the US as you know the cash grants are being dispersed under the Obama stimulus package, almost close to billion dollars have been dispersed there. This is really giving confidence to the entire sector that funding is becoming available. So discussions with customers and with respect to large new wind farms are beginning to start again. That gives us a lot of optimism that really next year and the year after that will be a lot better than this year has been.
(Sourced from CNBC-TV18)
