Suzlon

Suzlon Energy posted a set of very disappointing numbers for Q3FY13 wherein it posted a consolidated net loss of Rs.1154.53 crore v/s net loss of Rs. 286.46 crore in Q3FY12. Its net sales dropped 19.5% to Rs.4013.66 crore. This has been the fifth consecutive quarterly loss of the company. Falling demand and high interest outgo on its substantial debt has aggravated the situation for the company. It is sitting on a consolidated debt of Rs.13,587 crore.

Its debt recast package was approved last month by a consortium of 19 banks and along with a list of other conditionality’s, have asked the company to raise about $1 billion in three years as part of the debt-recast program. If one may recollect, the company, October defaulted in its $220.8 million debt repayment. The problem is that the company, despite the good order book is not able to translate the orders into sales as its working capital needs itself most of what is generated. And the rest by interest costs. Thus what is earns is eaten away by its debt and working capital. This acute liquidity crunch is what is pushing the company into deeper red. Once the CDR starts working, it might be able to finally able to actually translate orders into robust topline and hopefully the interest burden will also ease up. Q4 might not more or less along the same lines but one can expect the company do start showing better numbers from Q1FY14.