Suzlon gets "wind" of turnaround

Suzlon is the number one gainer on the BSE, currently up over 16% at Rs.25.45, just a tad lower than its intra day high of Rs.25.90. Its 52-week high is at Rs.31.35. Volumes are booming – from a 2w average of around 55 lakh shares to over 2 crore shares changing hands today.

The stock is reacting to the “turnaround” in its Q1FY16 performance but this back-to-the-black was possible only on account of a one-time gain of Rs.1314 crore. This was on account of gain on disposal of subsidiary and reversal towards impairment charges. Thus the company had a loss before tax at Rs.280 crore but after adding on this gain, it posted a consolidated net profit of Rs.1047 crore v/s loss of Rs.751 crore (YoY). It even had a tax write back of Rs.15 crore.

During the quarter the company had a net sales of Rs.2606 crore, down 44% and thanks to lowering of costs – 96% of total sales in current Q1 v/s 102% in previous Q1, with raw material costs down 20%, the company posted an EBITDA of Rs.212 crore v/s Rs.74 crore in previous Q1.