Suzlon Energy likely to post Q2 loss of Rs 200 cr

Wind turbine supplier Suzlon Energy is likely to report consolidated net loss of Rs 200 crore in the second quarter of current financial year as against profit after tax of Rs 48 crore in the corresponding quarter of last fiscal.

Net sales are seen going up by 10 percent to Rs 5,642 crore from Rs 5,131 crore during the same period on the back of execution of existing order backlog.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to fall 9.6 percent YoY to Rs 430 crore in the second quarter.

EBITDA margin is seen declining 165 basis points YoY to 7.6 percent.

Domestic volumes are expected to remain weak this quarter as well. Analysts expect total decline of 37 percent YoY in domestic volumes.

The company is plagued by negative operating leverage that expected to result in decline in operational performance.

Major disappointment in the first quarter results was the fact that company had reported a loss at the EBITDA level. Hence, the street will be closely watching if there is a repeat of similar performance.

High interest cost is expected to lead to a loss in this quarter as well.

Suzlon has gone for the corporate debt restructuring (CDR) in October 2012 after long negotiations to refinance its FCCBs.

The company has decided to restructure its debt with a maturity period of 10 years under CDR with a 2-year moratorium on principal and interest payments on term debt.

Banks have Rs 14,000 crore of exposure to Suzlon.

The share price has lost over 58 percent in the last one year and over 10 percent in the last one month.