UBS: Suzlon Energy 2QFY12: Reported profit due to reversal of provision

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


UBS Investment Research
Suzlon Energy
2QFY12: Reported profit due to reversal of
p rovision
􀂄 2Q FY12 – Rs829m loss on a recurring basis
In 2Q FY12, Suzlon’s operating income increased 34% YoY to Rs51.3bn and
EBITDA was Rs4.8bn (with 9.3% margins, a decline 70bps QoQ). Reported profit
was Rs480m (vs. Rs3.7bn loss in 2QFY11) and post adjustment for Rs2.2bn
reversal of provision and Rs884m Forex loss, the recurring loss was Rs829m (vs.
Rs3.8bn loss in 2QFY11). UBS-e for PAT was Rs390m for 2QFY12.
􀂄 508MW new orders for Suzlon in 2Q FY12
Suzlon has won 508MW of new orders in 2Q FY12 (432MW in India and 76MW
in North America). The Suzlon order (including REPower) book decreased
marginally to 4,734MW (vs. 4,739MW as of 1Q FY12). The Suzlon’s group order
book also increased to Rs323bn (vs. Rs293bn as of 1Q FY12) and includes
Rs205bn order book of REPower.
􀂄 Conference call on Monday, 24th October 2011 at 4:00pm IST
We expect to receive more details on Suzlon’s business performance and near-term
outlook in the call. However, the key developments for 1H FY12 are; a) REPower
‘squeeze out’ process is on track with Suzlon’s offer of Euro142.77/share for
acquiring remaining shares, the total ‘squeeze out’ costs to be ~Euro63m, b)
Hansen stake sale to generate Rs8.7bn, exit from Hansen has been completed.
􀂄 Valuation: Sell rating with a DCF based PT of Rs41
We have a Sell rating on Suzlon and see no near-term catalysts.