Suzlon Energy Case Study: Business Model, Financial Statement, SWOT Analysis

Our natural resources are at the point of exhaustion, and renewable energy is the only way to fulfill the energy demands in future. India is ranked fourth in the world in renewable energy installed capacity. Firms engaged in manufacturing wind turbines will have a crucial role in harnessing wind energy and moving towards a sustainable future.

Suzlon Energy Ltd is one the companies engaged in the renewable energy sector. In today’s blog post, we will share the overview and business model of Suzlon Energy. Moreover, we will discuss its financial performance and do a SWOT analysis of the company.

Suzlon Energy Company Overview

Suzlon Energy is an Indian multinational wind turbine manufacturer with its headquarters in Pune. It was established in 1995 by Mr. Tulsi Tanti and is now a leader in providing renewable energy solutions. Suzlon’s efforts in wind energy reduce 53.37 million tonnes of CO2 emissions annually by generating 54.62 TWh of clean energy each year. The company has operations in 17 countries and has installed more than 13,000 wind turbines.

Business Model of Suzlon Energy

Suzlon Energy has mastered the “Concept to Commissioning” Suzlon business model to provide comprehensive renewable energy solutions to its clients. The “Concept to Commissioning” model involves the following steps:

1. Feasibility Studies
2. Complex Engineering Design
3. Manufacturing of wind turbines and components
4. Installation
5. Commissioning of wind farms
6. 24*7 operations and maintenance

Since its inception, Suzlon has grown significantly, reaching a global presence with installations in 17 countries. It is the only Indian company to reach 20 GW wind energy installations.

Product Offerings

Suzlon Energy provides the following products:

1. S120 Wind Turbine Generator: S120 has a 2.1 MW capacity and is available in three variants. This product is suitable for low-wind sites.
2. S133 Wind Turbine Generator: S133 has a 3 MW capacity and can be installed in any wind site.
3. S144 Wind Turbine Generator: It is the latest model of wind turbine generator developed by Suzlon with 40% higher power generation than other models.

Market Details of Suzlon Energy Ltd. 

Current Market Price	₹ 80.4
Market Capitalization (in Crores)	₹ 1,08,658
52 Week High	₹ 80.4
52 Week Low	₹ 19.3
P/E Ratio (x)	127.56

Suzlon Energy Financial Statements

Income Statement

Particulars	March 2024	March 2023	March 2022
Total Income	6,567	5,990	6,603
Total Expenditure	5,743	2,677	5,869
EBIT	823	3,312	734
Net Profit	660	2,887	-166

Balance Sheet

Particulars	March 2024	March 2023	March 2022
Total Non-Current Assets	1,891	1,345	1,389
Total Current Assets	5,287	4,177	5,084
Total Non-Current Liabilities	249	1,723	3,578
Total Current Liabilities	3,008	2,700	4,234
Total Shareholder Funds	3,920	1,099	-1,316

Cash Flow Statement

Particulars	March 2024	March 2023	March 2022
Cash flow from operating activities	33	466	1,301
Cash flow from Investing activities	-151	84	-18
Cash flow from Financing activities	177	-684	-1,044

Key Performance Indicators (KPIs)

Particulars	March 2024	March 2023	March 2022
Net Profit Margin (%)	10.11	48.35	-2.52
ROCE (%)	21.04	20.96	29.09
Current Ratio	1.76	1.55	1.20
Debt to Equity Ratio	0.03	1.73	-1.18

SWOT Analysis of Suzlon Energy 

Strengths

• Technological expertise: The company excels in wind turbine technology, providing efficient and cost-effective solutions. Suzlon invests in R&D to continually improve turbine design and efficiency.
• Market position: Suzlon is a leading player in India’s wind energy market and has a strong market share.

Weaknesses

• High Debt: Suzlon’s profitability and ability to invest in new projects have been significantly reduced due to high debt levels.
• Operational Challenges: Suzlon has been facing operational challenges, such as delayed project execution and increased costs.
• Low cash flow from operations: Company financials show lower cash inflow from operating activities for the last 2 years. 

Opportunities

• Growing demand for renewable energy: The demand for the company’s products will increase in future, which will result in increased revenues and profits
• Strategic Partnerships: Suzlon can expand its operations in international markets by forming strategic alliances with other companies.

Threats

• Regulatory Changes: Changes in government policies can have a negative impact on the company’s profitability.
• Environmental Risks: Suzlon Energy has been majorly involved in harnessing wind energy, and any changes in wind patterns can affect energy production.

Conclusion

Suzlon Energy Ltd., a known company in India’s renewable e­nergy sector, uses its te­chnological expertise to provide renewable energy solutions to its clients. The company’s ability to provide effective solutions makes it the market leader in the renewable energy industry. However, variable cash flow from operations, high P/E ratio, etc., also represent significant risks. Investors must thoroughly analyze the financial statements, gauge their risk tolerance capacity, or consult a financial advisor before investing.

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