At 13%, Suzlon shares fall most since April

At 13%, Suzlon shares fall most since April

New Delhi: India’s biggest maker of wind-turbine generators, Suzlon Energy Ltd, declined the most in over six months on the Bombay Stock Exchange on Tuesday after posting a wider loss than analysts estimated as equipment orders slowed.

Suzlon fell 13%, the most since 16 April, to Rs58.25. The shares had their longest losing streak since the 10 days ended 10 October 2008. The benchmark Sensex declined 3.1%.

Orders, including those from India, may improve in the coming months after being delayed by the global recession, chief operating officer Sumant Sinha said in an interview. The company is currently refinancing borrowings, which stand at Rs13,700 crore, he said.

“If the company is able to refinance its debt, it will be a positive for the stock," Bhargav Buddhadev, an analyst at Noble Group who has a “positive" rating on the stock, said over phone from Mumbai. “We feel that the worst is over for the company."

The loss in the three months ended 30 September, including that of units, widened to Rs356 crore from Rs130 crore a year earlier, Ahmedabad-based Suzlon had said in an emailed statement on 31 October. The average of 11 analyst estimates compiled by Bloomberg was a loss of Rs87.80 crore. Sales fell 31% to Rs4,790 crore.

Suzlon scrapped a rights offer last year when the markets tumbled. The turbine maker said it may sell all or part of its stake in unit Hansen Transmissions International NV to cut some of the debt taken over the past two years to complete the acquisition of Hamburg-based REpower Systems AG.

As much as $750 million (Rs3,525 crore) of loans taken for acquisitions will be refinanced in the next 10-15 days, Sinha said, and added that the firm expects to refinance all its debt in the next two months.

Wind power equipment makers got fewer orders this year because major economies are still struggling with last year’s financial crisis.

Orders announced by wind-turbine makers dropped 56% in the first half of 2009, according to a September report by Denmark-based MAKE Consulting.

Suzlon lost sales last year after some blades cracked and customers in the US cancelled orders. Repairs were completed in September at a cost of $100 million, the company had said on 13 October.

“The blades issue has been addressed and put behind us," Sinha said. “Our business visibility will improve as the industry starts getting orders. Between REpower and Suzlon, we have orders in hand of 3,000MW, which is comparable to our competitors."