Suzlon Energy Reports Record High Operating Profit in Q1 FY25, Positive Trends in Key Areas

Suzlon Energy, a largecap company in the renewable energy industry, has recently declared its financial results for the quarter ending June 2024. According to the report, the company has shown very positive performance in this quarter, with its operating profit (PBDIT) reaching a record high of Rs 370.08 crore. This is also the fifth consecutive quarter where the company has seen growth in its operating profit.

The operating profit margin has also seen a significant increase, reaching its highest at 18.31%. This shows that the company’s efficiency has improved, leading to better profitability. The profit before tax (PBT) has also seen a positive trend, with a growth of 65.8% over the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) has also shown a growth of 69.3% over the average PAT of the previous four quarters.

The net sales of the company have also seen a positive trend, with a growth of 23.9% over the average net sales of the previous four quarters. This indicates a positive sales trend for the company in the near term. The earnings per share (EPS) have also reached its highest at Rs 0.22 in the last five quarters, showing an increase in profitability and creating higher earnings for shareholders.

However, there are some areas where Suzlon Energy needs to improve. The interest cost has seen a significant increase, growing at 53.21% over the previous half-yearly period. This signifies increased borrowings by the company. The debtors turnover ratio has also reached its lowest at 3.55 times in the last five half-yearly periods, indicating a slower pace of settling its debtors. Additionally, the non-operating income has also reached its highest at Rs 22.76 crore in the last five quarters, which may not be sustainable in the long run.

Overall, Suzlon Energy has shown a strong financial performance in the quarter ending June 2024, with positive trends in key areas such as operating profit, profit before tax, and net sales. However, the company needs to address its increasing interest cost and slow pace of settling its debtors to maintain its growth in the long run. Based on these financials, MarketsMOJO has given a ‘Hold’ call for Suzlon Energy’s stock.