Suzlon confident despite 'temporary volatility' in India

Indian wind group Suzlon said it is confident of keeping its growth momentum despite “temporary volatility” in its domestic market as it moves from a feed-in tariff (FIT) to auction-based model.

Suzlon claimed its financial recovery was well established as it delivered a fourth consecutive quarter of positive net profits for the first three months of the 2017/18 financial year.

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The group made 900m rupees ($14m) in the April-June period, turning around a 2bn rupees loss at the same stage last year.

That came thanks to operating profits (Ebitda) 168% higher at 4.75bn rupees and quarterly volume sales that doubled to 412MW.

The company said it is looking beyond the short-term disruption to the market caused by an abrupt transition to competitive auctions that has seen demand plunge in the early part of the current fiscal year, due to a hiatus in procurement by India’s states.

Suzlon CEO J P Chalasani said: “We are confident this momentum will continue. The transition from FIT to competitive bidding has created temporary volatility in terms of volume and margins. In the long-term, all stakeholders will benefit from higher volumes.”

But Suzlon said the “temporary uncertainties” mean “we have further strengthened our risk management in order to maintain our margins”.

The depth of slowdown in the Indian market took most in the sector by surprise, not least market-leader Siemens Gamesa, which partly blamed the situation there for a poor last quarter.