Suzlon Energy's Q2 financials show mixed results, with positive sales trend but declining cash flow

Suzlon Energy, a largecap company in the renewable energy industry, recently declared its financial results for the quarter ending September 2024. The stock call for the company by MarketsMOJO is 'Sell'.

According to the financials, Suzlon Energy has seen a flat performance in the second quarter of the fiscal year 2024-25. The company's score has fallen from 24 to 2 in the last three months. However, there are some positive aspects to the financials.

The net sales for the half-yearly period have grown by 48.79% year on year, reaching Rs 4,124.97 crore. This indicates a very positive sales trend in the near term. Additionally, the company's cash and cash equivalents have also increased to Rs 777.91 crore, the highest in the last six half-yearly periods. This shows an improvement in short-term liquidity.

On the other hand, there are some concerning factors in the financials as well. The operating cash flow for the year has been the lowest at Rs 79.53 crore and has been falling each year for the past three years. This indicates a decline in the company's cash revenues from business operations. Furthermore, the interest cost for the quarter has increased by 25.85% quarter on quarter, which signifies increased borrowings.

The profit before tax less other income (PBT) for the quarter has fallen by -15.8% over the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) for the quarter has also fallen by -13.3% over the average PAT of the previous four quarters. This shows a very negative trend in the near term for both PBT and PAT.

In conclusion, while Suzlon Energy has shown some positive growth in terms of sales and cash reserves, there are also some concerning factors such as declining cash flow and increasing interest costs. Investors should carefully consider these factors before making any investment decisions.