Suzlon Tumbles 9% After Weakened Rupee Results in Quarterly Lossby
Suzlon worst performer on BSE 500 and NSE Nifty 500 Indices
Loss of 2.6 billion rupees posted in the fiscal first quarter
Suzlon Energy Ltd. fell the most in seven months after posting a loss of 2.6 billion rupees ($39 million) in the fiscal first quarter because of a decline in the local currency and financial costs.
The Indian wind turbine maker’s stock dropped as much as 1.60 rupees, or 9.3 percent, to 15.65 rupees a share before trading at 16.05 rupees at 5:50 p.m. in New Delhi. It was the biggest intraday loss since Feb. 10, making Suzlon the worst performer on both the BSE 500 and the NSE 500 indexes.
The company’s revenue fell 37 percent to 16.5 billion rupees in the three months ended June 30 from 25.9 billion rupees a year ago, when the company reported a profit of 10 billion rupees, according to a filing to the stock exchange on Tuesday.
Suzlon said results in the period were “not directly comparable” to the previous year because it divested its German subsidiary, Senvion, in April 2015.
Inventory build-up costs of 3.39 billion rupees which also dragged on results will be reduced in the second quarter as it catches up on volumes shipped, management told investors Wednesday in a conference call.
“We have a build-up of 5.6 billion rupees higher as compared with quarter four so that we can catch up on volume second quarter onwards," Suzlon Chief Financial Officer Kirti Vagadia said.
Chief Executive Officer J P Chalasani said he’s confident Suzlon will register higher volumes after assessing the company’s “plan for the year as a whole.” Company chairman Tulsi Tanti said he expects Suzlon to grow faster than the overall Indian market, which is seen expanding 30 percent in the current financial period.
The decline of India’s currency between April and June accounted for foreign-exchange loss of 900 million rupees after the refinancing of $590 million of debt in April, Vagadia said. New accounting standards prohibited losses from being spread out over maturity.
The company in the first quarter of current fiscal delivered 204 megawatts, little changed from last year’s level. It had an order book of nearly 1,205 megawatt as of June 30.
Suzlon has 15.5 gigawatts of wind installations globally, of which 9.5 gigawatts are in India.