Thank you for joining us for this Suzlon quarter one FY 2026 earnings conference call. Especially considering that these are crowded days for us. This year is a momentous one for us as we celebrate 30 years of Suzlon. For the past three decades we have conclusive resilience, innovation, and future focused mindset that continues to shape our journey. Talking about the industry, the recent amendment to the wind ALMM procedure by MNRE marks significant policy streak, one that is expected to realign industry dynamics by providing a level playing field to all participants and strengthen supply chain resilience. Suzlon is fully compliant and strategically aligns with the policy framework. On the commissioning front, the industry over 2 GW is already commissioned in the first four months of FY 2026 , signaling a potential script in the execution space.
We expect the industry to do close to 6 GW of wind installations in FY 2026 . Coming to business highlights, we are delighted to report yet another record breaking quarter with Suzlon setting a new benchmark in execution by delivering an unprecedented 444 MW in Q1 FY 2026 , which is the highest ever first quarter in the last 30 years. Our order books are past 5.7 GW, marking 10 consecutive quarters of growth and reaffirming our leadership across PSU and C&I segments. Order book for the S144 model now exceeds 5 GW, a testament to superior technology and strong customer confidence. We take pride in chasing the S144 as the lowest carbon footprint across all the variants globally and complies with the latest MNRE regulation.
On the manufacturing front, our capacity of 4.5 GW is fully operational and ramped up to meet order book at Suzlon. We commissioned around 117 MW in Q1 with an additional 547 MW of arrested WTG capacity in the pre-commissioning stage, bringing the total to over 664 MW, with less than 25% of our order book comprising non-existing projects. Yet, land acquisition rights outside our scope, line side delays have impacted commissioning for Azure. We have prioritized the project with hostile land availability upfront. Looking ahead, projects which come with substantial land readiness are progressing well and offer greater commissioning visibility for FY 2026 . Additionally, Suzlon is actively pursuing a long term strategy to mitigate land related risks by developing an actual project pipeline. Our OMS business continues to do well with more than 15 GW of capacity in India with machine availability ensured above 95%.
Renom continues its size for customer fleet acquisition with AUM costing 3 GW. Our forging and foundry business started showing uptick in the last three quarters and we expect to continue to strengthen in FY 2026 . Our top priority remains the timely execution of our robust order book while maintaining the highest standards of quality and ESG. We remain committed to achieving our FY 2026 guidance of 60% year on year growth across all key performance parameters. I would now like to invite Himanshu to take you through our financial performance.
Thank you J.P. sir and good evening ladies and gentlemen. As always for this discussion I shall be referring to slide number 19 to 26 of our investor presentation which has now been uploaded on our website. Taking it to the Q1 FY 2026 numbers.
In Q1 FY 2026 Suzlon continued its exponential growth trajectory delivering 444 MW in revenue recognition which is recording 62% growth on a year on year basis with all financial parameters showing up. Suzlon reported consolidated revenue of INR 3,117 crores in Q1 FY 2026 with EBITDA reaching INR 599 crores, a robust 62% year on year growth. The EBITDA margin improved by 86 basis points to 19.2% up from 18.4% in the same quarter last year. We achieved the profit before tax of INR 459 crores posting a year on year growth of 52% over Q1 FY 2026 . We are pleased to report our balance sheet as of June 2025 reflects the position of exceptional strength with a consolidated net worth of INR 6,542 crores and our net cash position stands at INR 1,620 crores, further enhancing our financial flexibility and resilience.
Adequate banking limits have been tied up of approximately INR 7,000 crores for execution of current order book towards working capital requirement. I would also like to reiterate that our end to end wind energy model supported by a fully integrated supply chain, proven execution capability and best in class service delivers a competitive edge that is both distinct and difficult to replicate. With this I would now like to hand over the call back to J.P. Chalasani sir.
Thank you. Sir, before we start discussing the results with all of you, I thought it's good for us to upfront the brief view on the issue of public elements today. As you all know, which we reported publicly, Himanshu has stepped down and he would be sitting as CFO as on 31st of August this year.
Himanshu guiding us 4 years back, I still remember at that point of time I was advising Tanti on key managerial person. We had at least two or three calls at that point of time. For him to take this plunge and come to Suzlon, the stage where we are in, and it was good that I was able to convince him. He came on board and all of you know that he had a phenomenal performance for the last four years. The results assured all that performance as CFO. Obviously, the next question is the growth in the company in the financial position that we can't be beyond the group CFO.
A few months back we started the session and said that Himanshu should move to business for his purpose and in fact at that point of time we started search for the effects of a CFO man start and we've been discussing various growth opportunities for him within the basis in the company. Obviously, when he went through a number of discussions, pros and cons, and also he had an opportunity in the financial sector. I know that having spent hours and hours together as friends, as mentors, as a group CEO versus group CFO, we went through various pros and cons of continuing here in the business or in the financial sector.
At the end of all the debates, he finally decided that at this age, at the age they were in, what he has and the definitive interest what he has, he decided to take up the financial sector job. That was a hard decision for him. Having known what he went through in taking the decision, we all said we respect the decision and we will support him fully. As he mentioned in his letters, obviously he is available to us at any point of time we need to talk on and I clearly told him that I take just blank checks from Suzlon and cash and if we would, I would personally and as a company would keep dragging him into all critical issues but support moving ahead with Suzlon.
I know personally it has been a tough call for Himanshu to decide because his heart's remained with Suzlon, but the mind always says what to do next. I think that's the reason he took this call and thereafter, blank, he is fully available. I thought I should let you know and also wanted to say that because we were moving into business startup search for the Group CFO and then back and we are in the advanced days of appointing the successor to Himanshu, I thought it's better now we owe you this explanation upfront rather than somebody asking.
Us.
Yeah, thanks a lot. It's, you know, no words can do justice to my four years that I've had here. It's been a privilege to serve as the Group CFO at Suzlon over the last four years. When I look back at this journey, it's been nothing short of mesmerizing, one that will always remain close to my heart and will cherish. From navigating the challenges of a debt-laden organization to now witnessing Suzlon as a cash surplus, resilient enterprise, I feel a deep sense of fulfillment. The dream of reviving Suzlon was an ambitious journey that we embarked upon, and today I can proudly say that Suzlon not only weathered the storm but is now firmly anchored, with the organization now on a strong footing. I believe this is the right time to explore new professional horizons for me personally, as explained and outlined by you.
I echo the thought that it was a very, very tough decision and a well thought through one, after which I have decided to look for opportunities outside Suzlon, and whilst I will be here until the 31st of August this year, as I've also put in my resignation letter and as echoed by J.P., I will be available at the end of the phone, should the company, the management, or the board or the Tanti family need me at any point in time. With this, I want to express my heartfelt gratitude to the Suzlon family, my colleagues, the leadership team, every individual, all of you who are on this call. Several of you have, in fact, on several occasions, one on one and in forums.
I really want to thank all of you, investors and analyst community, for the support that you've shown in us as the management during the transformation journey. With that, I'd like to conclude my presentation, and we can open the floor to discuss any performance-related, Q1-related questions the callers may have. Thank you.
Go ahead, open it for the Q and A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press Star. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Sumit Kishore from Axis Capital. Please go ahead.
Good evening. Thanks for the opportunity. My first question is in relation to the Q1. The Q1 interest cost seems to be up quarter on quarter even though the company is. Is there any specific reason? Also, if you could comment on the tax rate, you started with about 29% tax rate in Q1. What is a sustainable tax rate we should be working with going forward on an annual basis.
Hi Sumit, so far as the interest cost is concerned, there are certain one-time processing fees which we paid out to institutions for working capital optimization that you will see in place over the next few quarters. As you know, a large part of our working capital is or has been dependent on letter of comforts issued by REC based on which we take exposure from the bank. It's a double ongoing commission that you're paying.
Now with our improved results and with an improved FY 2025 performance, there are quite a few banks where we have tied up direct working capital limits. As a result, there is one-time processing fees that we paid during the quarter to these institutions. As we move along in the journey quarter on quarter basis, this will only help us optimize our bank guarantee and LC charges this quarter. We maintain that close to about INR 200 crore per annum would be the net interest cost going forward for the year. So far as the tax rate is concerned, you should stabilize at about 25% through the year. As you know, for this year it will just be a P&L charge which is a charge off of the DTA that was created in FY 2025. There is no cash outlay on account of tax.
Depending on how this year pans out, we may have cash outlay going forward but you should be working with about 25%.
What was the one-off impact in interest for the quarter?
Don't have the numbers handy but as I said, directionally assume about INR 200 crore of net interest cost for the year.
The second question is in relation to those things. Out of 44 MW in Q1, I mean typically you had a 40/60 H1:H2 on a consistent basis. Is this year going to be somewhat different if at all?
We expect to be same and then we have, as I said in my opening comments, we expect 60% growth comparative market to be there
but the phase out will be similar to earlier.
Okay, and finally after ALMM, what's your early indication for the upcoming tenders or upcoming dates or orders in terms of competition, especially from the Chinese OEMs.
As I said, what the ALMM does, of course, there are three components: in-house R&D and cybersecurity, which we will not talk about right now on the subtitle source. We need to look at it. What it does is create the level three, so everybody has to source from desktop wings, other than companies listed in ALMM, companies which anybody wants to list here. There is an inspection process and quality checks before it gets. I think whatever the disadvantage we have seen now with respect to the same, the other one is host decisions. All of us are on the same level. Even with the disadvantage, we had the significant amount of order book and moving your heads up.
I feel it is good for us, what is coming, and we are fully compliant in all three aspects, whether it is routing or it is the R&D or it is the cybersecurity.
Thank you so much. Thank you.
Thanks. To answer your question, out of the INR 70 crore, INR 14 crore is the one-time processing fees for this quarter.
Okay,
thank you.
Thank you. The next question comes from the line of Mohit Kumar from ICICI Securities. Go ahead.
Yeah. Good evening sir and thanks for the opportunity. For my first question, order inflow. How is the order inflow opportunity looking like given some concerns on the slowing down of signing up of power purchase agreements and concerning land acquisitions.
Mohit, first of all, I think I'm not going to ask my people for business plan. I will look at your run list report. You think they log on and everything. Okay, that's to you. On the order book price, if you look at the breakup, 54% of order book is C&I connected, and about 21% is PSU , and 25% is Commission B.
Sir, please go ahead with your question. Hello. As there is no response from the participant, we move to the next participant. The next question comes from the line of Amit from Morgan Stanley. Please go ahead. Mr. Amit, please go ahead with your questions.
Where we were expecting that we will talk to my Criswell leverage once the volumes pick up. Can you put some light on it because on contribution level things are going like OMS and on the other hand your business margins are declining. Is there some basis that we can provide over here on cost control?
Before I answer your question, first just want to make sure. Are we audible?
Yes sir, I can hear you.
Yes sir.
You're audible.
Yeah. Sir, we apologize. I think something got interrupted and J.P. was answering Mo's question earlier. We'll come back to Mohit's question. Amit, we'll answer your question now. From a manpower cost perspective, as we've maintained, I mean of course O&M will continue to deliver close to 40% EBITDA margin. That has always been our guidance and we are very close to that. Quarter to quarter it may differ based on certain one-time income or one-time charges. The range may vary from a tight range of 39%- 41% depending on quarter to quarter. Going forward, on the overall breakeven analysis for the WTB division, as we maintain, about 700 MW- 750 MW, so long as we go, we will be breakeven at the EBITDA level and we will ensure that the manpower cost or other operational costs are kept under control.
Another feature that we've started adding from Q1 this year is that the annual PLI provisioning, which historically was done to the extent of 80% because the company was always falling short of its targets or for obvious reasons we know of, but now we started providing the PLIs to the extent of 100%, which means that we are of course confident of meeting our own internal budgets and targets, which are in line with the guidance that we offer to the streets.
Sir, the line for the participant has been disconnected, so we'll move to the next participant. The next question comes from the line of Sucrit Patil from Eyesight Fintrade Private Limited. Please go ahead.
Hi, Sucrit Patil here, this is my question. Is Suzlon looking at growth in the wind energy sector and maybe looking at new markets or technology? How are you planning to reach the growth if demand slows or there are some policy changes, and if some plans don't work out, do you have a backup to protect the margins and keep moving ahead?
Yeah, obviously, today the order book is 5.7 GW as on today that we speak, and then we have many more orders which are under discussion. There is sufficient order book for this year, next year, and the other one.
As we mentioned sometime back, our order book is predominantly for C&I segment and the PSU segments, which is not going to stop because the C&I sector needs this switch over to renewable energy for the paraprofitable as well as for the green energy coming into the first day products, and PSU would congregate us if at all. All we can speak about is that we'll let the TPS sign, and the bridging route can be slightly slowed down, but I don't see that overall impact to that extent. We are very much on target to reach that. If not 100, as we always mentioned, we will definitely touch 85 GW-90 GW by 2030. We will reach there. Even today as we speak, October 17th, if the wind is under construction, and we already crossed about 53 GW or so.
I really don't see that as an issue, and as we mentioned sometime, that's to ensure that anybody backing out, we are always consciously overbooking compared to what we can supply in a quarter or any year
Before we go. I'm just curious, in case the competition picks up, are you thinking of going into JV or into partnership with any firm or any possible? Can you discuss with whom would you be partnering up?
We don't need to partner with anybody in India. We are the leading Indian manufacturer, and the competition has been there. Competition will be there. Only the competition would keep changing. At one point of time, we were competing with European players, and today we're competing with same experience. Competition would always be there, and we always remain in the market because we have in-house R&D.
We bring our models into more competitive, and then today, even after the ALMM has come, new ALMM regulations are coming. We can maintain some time. That also removes our disadvantage, and we are on the same level playing field with everybody because they saw that combination of cheaper imports is not there anymore moving ahead. Therefore, I don't. I think logically if you see that was an issue, but having said that, we always need to keep working towards the reduction of cost per kilowatt hour of our turbines. What would happen from the point of reducing the cost of effectiveness as well as improving the efficiency of retail carbide? In the next few months, you will see your endure vessels coming in in terms of the same platform. We can float efficiencies, a lot of that.
Great. Thank you very much for your guidance.
Thank you.
Thank you. The next question comes from the line of Siddhartha, an individual investor. Please go ahead.
Hello. Hey. Am I audible?
Yeah. Yeah you are. Please go ahead
Swamiya. It's on a great set of numbers. Sir, two questions I wanted to ask, one on the new product development journey that you just talked about. Could you please shed some light on what kind of product development journey do you have? I understand the S144 wind turbine is one of the highest performing products in the market today. Are you looking to launch, you know, product beyond the 3.15 MW, say somewhere around 4 MW turbines?
Let me not put a number quiz, but as you know, we are the only Indian OEM who has, you know, in-house R&D. We keep developing models from time to time.
What we do is that because we study this, I mentioned this in earlier calls as well, because we study the data across the country from time to time, every year we keep using insights. We know what type of a wind site will come in through your CS down the line and what type of a turbine model is required. Therefore, that cost per flow, whatever, doesn't go up. Once one model is out, even before that is out, next model is always on the design for us. I can assure you that the next set of models would come in time. Also, let's understand the fact that the LCOE price doesn't make any sense in India, especially what is important is what comes as cost hours.
In fact, the Director General of MNRE was on record in the open meeting with the Chairman, with the Minister, saying that India is best for anywhere between 3 MW- 4 MW because of our low wind speed and we are not suitable for icing and second union, also larger size is an issue. Therefore, it takes some time before large turbines can be transported to the site. To answer your question, yes, we will bring out the next model as and when we think it's necessary.
Sure. Thank you sir. The second question on the industry dynamics. As you rightly pointed out, the LCOE is the North Star metric that a customer basically looks at. With battery prices decreasing further, now we see that there is some indication that prices may go up. Are we seeing that a solar-plus-storage sort of a system would displace wind?
Except for the FDRE projects
we discussed earlier, wind parity is, let's say, anywhere between 3.6- 3.9 depending upon which state, what it is. Most of it comes during the peak hours. During the peak hours if you're putting solar plus this battery, solar tariff is, let's say, 2.5, 2.6 today with ALMM requirement. If I take out the 2 point. Unless the battery cost is less than INR 1.2 per kilowatt hour, the solar-plus-batteries can never ever replace yield. Therefore, what would actually happen is nothing to do with one replacing the other. The different combinations of solar-plus-storage, unit test storage, solar-plus-unit test storage would come in depending upon the load profile of different states and different requirements. Predicting one is going to replace the other one, it won't happen. Also, from a grid stability point of view, it can't happen.
Thank you so much.
Thank you. The next question comes from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yeah, so I'll repeat my questions.
We went to other questions. We covered you there.
Yeah, no, no issue. The question was how's the order info opportunity looking like given concerns on slowing down of and
we at least if you look at last 10 quarters, 9 to 10 consecutive quarters, our closing order book has been higher than the opening order book in spite of the fact that the deliveries each quarter are swinging, facing. Okay, so therefore order info has been very steady for the last nine quarters, this sustainable growth initiative.
Having said that, looking at the under pipeline, what currently we're discussing, one is we have a 5.7 GW, and second thing, looking at the archetype and what we have, I don't foresee, I'm not saying for the sake of saying, I don't foresee order, which I mentioned earlier, order is an issue for at least next couple of years. I don't think that's any issue with respect to the next two to three years. We have enough order books flowing in from seven days. Let's also see, our advantage is also that slowly we will move ahead with the EPC. EPC, nobody offers it, land, then switch out OMS , plus ALMM, all this put together. I really feel pretty confident that order book would not be an issue.
The second question, what are the aspirations for us for SE Forge for next three to four years?
See, it started, first of all, we wanted actually to put it on the growth trajectory on a consistent basis. If you see the last three to four quarters, you're consistently seeing the growth, so you know we can always have a debate about this growth rate is sufficient, but at least consistent growth rate. In fact, if you see the quarter ones, there's been one of the best quarters for the SE Forge, with various, one is that we are now expanding into non-wind in a big way and then considering an export as well. I don't want to put a number to what it is going to be, but we see a significant uptick.
I would actually prefer to talk about the export years plan for SE Forge towards end of this year after establishing this year members thoroughly and also whatever is happening in terms of ALMM, in terms of BAS, and all these are going to help DSC ports now. In fact, now, which is statistics only, the bearings can't be imported, not imported, they don't use a word of imported, but basically bearings have to be domestic listed stores. I think SE Forge will stand in good position. What I see as a spare part is that it's good for us to talk first actually showing one year to the numbers and which is unveiled of doing this year
export potential. I think the price mentioned the export potential.
Do you think there is a significant near term opportunity in the neighborhood or maybe the Middle East and any commercial export potentially helpful here?
There is reasonably good export potential on the export as they said in the neighborhood in the Middle East even including Europe where we can unique companies. Right now I'm not talking about U.S. that was one of the first countries we were targeting. I don't think neither you nor can comment upon whether I can import export years on at this stage. We're concentrating on the neighborhood Middle East and Europe. We are now right now in the process of studying different countries, what models, what price changes are there. Most of this is harder than the Middle East. Most of the business we have been present and we're talking about our program and getting the right kind of model ready.
Let's say can start some sort of exports in a year from now, gradually start up offering and taking the others towards end of this year.
Thank you.
Thank you. The next question comes from the line of Amit from Morgan Stanley. Please go ahead.
Hello sir, the live box. The question that I had was only was contribution margin that's really pretty good at 26%. Do you see this in settling like this? What changed has jumped from very
much you will exchange but my business escapes there. I think, you know firstly I think we'll maintain our guidance that it will be about 22%-2 3%. This quarter has been high, you know because of two or three reasons. There are certain high, you know average page size orders that have got delivered in this quarter and also there is lower project activity due to the early onset of monsoon, plus of course we've been able to maintain our COGS. Now the COGS maintaining would be an ongoing phenomena but the other two factors are very, very quarter to quarter dependent.
When you sort of look at overall matrix on an annual basis, I would say we maintained the guidance of 23%. This was clearly an outlier performance for this quarter.
I want to take this chart in continuing on this point, your realization actually are declining to around INR 55 million per megawatt now despite me saying that there were some high price orders in this quarter and if issues are not there, but still the phone goes down. Are you seeing pressure despite the competency at the moment?
It's not pricing pressure. It's a low per EPC activity and low EPC billing. With the higher EPC billing the INR 55 million would actually go close to INR 57 million, INR 58 million. We're maintaining. There's no pricing pressure that we're seeing from customers or from competitors.
All right, sorry sir.
Thank you.
Thank you. The next question comes from the line of Nikhil from UTI Mutual Fund. Please go ahead.
Yeah, thank you. Sir, just one question from my side. If you look at the last five quarters, we have supplied 2 GW and our actual commissioning is somewhere around 500 MW. Just want to understand how long will this go on and somebody starts seeing some kind of material success going ahead and you rather have some kind of an 60% going in bag if you can.
Pretty good question. This is what is bothering everyone. Obviously, yes, commissioning wise when you look at it, that's most different. There are a number of sub banks out there commissioned, in fact beyond June what we announced. Even in this 30, 40 days, we commissioned another 50 MW and the 166 MW. With three commissioners, these turbines are ready to get onto the grid but the client is not ready. With 33 k V erection system, around 18 MW have been erected.
Therefore, things are at different stages of the erection listing and hopefully now this year onwards, like you're seeing cycles. If you look at quarter one last year, it was 700 MW, this year is 69 MW. Slowly the pickup is happening on the execution. I think before we reach the stage, what you're talking about, you know, will it have an impact on turbine supplies? I think we should be able to manage this as reverse. In fact, we would have supplied more than what we actually supplied in quarter one if there was another pressure of targets not being. I find it there. To specifically answer your question on the guidance, no, we can do the 60% with all these questions. We know what projects we're doing, it's what projects we're opening up. We don't see that this is having any impact on the guidance from U.K. categorically.
Okay, thank you.
Thank you.
Thank you. The next question comes from the line of Anuj Upadhyay from Investec. Please go ahead.
Yeah, thanks for the opportunity. My question relates to the ALMM and that is the localization push which definitely would lead to self-reliance, but don't you think it would lead to a short-term supply chain disruption because other key elements like special gearing, gearboxes, yaw machine, turbine control, they all are import. Won't this have any kind of an inflationary impact on the cost per se? If you see the industry anyway, India has close to 15 GW-16 GW of overall wind turbine generator manufacturing capacity, of which the utilization would be in the range of, I mean, close to around 6 GW is what we are securing on an annual basis. Would this kind of,
after you answered yourself the question, the underutilization goes up.
If we are, let's say, that some of the components supply is at 25%-26% utilization, in fact our scenario for is about 36% is the capacity. As the capacity utilization goes up, the cost actually comes down, doesn't go up, because your fixed cost remains the same. The second is, I don't see any problem in terms of gearboxes, generators, and everything. We checked the full, there is sufficient capacity available in India. Also, with this upfront saying that for projects which are going to get commissioned in the next three years, the bids are submitted are one year ahead of commissioning for other things, but there is enough stabilization period for us to meet that. Personally, I don't see any issue.
In fact, even before the notification came, I have seen many of these foreign suppliers going around the country and trying to source their streams and talking to various people, designing their product. Everybody on the top. I personally don't see any issue with respect to the supply constraint, as well as I don't see any concern with respect to the cost, because even today our manufacturers, our supply is mostly domestic, competitive in the market. Therefore, both points are good and also building is timelines. I don't think there's any impact. Actually, two to three years down the line, cost should actually start coming down because capacity utilization significantly will go up in India.
Okay, that's helpful, sir. Just to react, you mentioned that the WTG market for the current year would be around 50 GW. In terms of delivery, how much would that be?
Delivery generally doesn't—nobody measures the delivery. We can only talk about our database. You don't know who delivered how much, how much is sitting on the ground, because except Suzlon Energy Limited, there is no listed company which announces what deliveries they made. That is not tracked by means, at least publicly it's not tracked. Even this is a commissioning target.
Fair point, sir. That's helpful. Thank you.
Thank you. The next question comes from the line of Amit Mahawar from UBS. Please go ahead.
Congratulations. I just have one question on the orders that we've won in the last two, three quarters. Are these different on the terms in terms of advances that we have, the execution timeline, and particularly if you want to comment that you connect this with the improving sonar, whether we call it right, which reflects a lot of gaps or some consolidation in the sector. I just wanted to connect these two, and particularly on the quality of orders, the terms, also the timeline for the case. Thank you.
The first thing is our aim is always not to increase the price even if you're in a monopoly situation because price goes up, tariff goes up, and market has recorded a number of times. Our aim always is to keep reducing the cost.
Any new model comes when coming down, and then we also keep offering some sort of reduction to civil customers. Therefore, I don't see any that sort of a pressure. Also, even the latest product works. We have our margin expectations, and we don't compromise on that. Everything is taken at that level. Obviously, depending upon some contract, there is a different risk pattern. Obviously, this can cost, would go through the difference about the commercial terms, payment terms, but otherwise base case would remain the same.
The same question, broadly you're confident that in case there is any possible, you know, minor inflation cost, it is within mechanics to see and manage test so that the optimized for the client.
I confirm.
Sure. Thank you and good luck.
Thank you. The next question comes from the line of Mahesh Patil from ICICI Securities. Please go ahead.
Yeah, first question is on the margin side. Given the increasing PSU orders and share orders in our book, can we expect improvements in margin especially in the WTG segment? Second question is will part of this improvement in margins be offset by, let's say, increasing share of WTG in the overall revenues compared to, let's say, a higher margin O&M business?
Before that, if you are taking that, you know, you were giving a guidance of saying that we don't need things, then you revised it to early thing late. Since then, we said that, I think early 20s, early 22. We have been revising and improving our margins anyway from time to time.
Yeah. I think as I mentioned earlier, we maintained that, you know, at least the contribution margin we will continue at 23% on a longer term basis, at least for this financial.
This quarter numbers may be a one-time outlier led by, you know, the three factors that I outlined earlier. We maintained the 23%. I think, you know, the margin that we're driving, that we're giving, is based on the order book mix that we have currently. Now, of course, going forward, if that order book mix changes significantly, then, you know, we may come. Right now, where we stand, we maintain that we will be at about 23%.
Okay. For this 60% guidance that you have given, if we consider this on the scrolly on the WTG installation, considering, let's say, inflation, can the top line growth be higher than 60% or 60% for top line as well? That is the read.
No, we can't decide. We said it presents on all the key parameters, which is what we stand.
Okay, thank you. Thank you.
Thank you. The next question comes from the line of Aadesh Mehta from Motilal Oswal AMC. Please go ahead.
Hello sir, I just wanted to understand versus Chinese competitors what would be the pricing differential lead. That's my first question. Second question is with this requirement of, you know, domestic manufacturing of components, what does this go to SE Forge? You commented that PLI could do better. If you can just elaborate more on that. Thank you sir.
Yeah, see, on the Chinese, I can't say what would be the difference coming. We normally feel that there is existence about 5%-6% of them. It's called till now, that's the range what it is. The thing is that there is a great differentiation factor between us and them. It's not just the types because of which people give it to us. One is reliability of the product or how people look at it.
Second is that we are here, the Indian company, and we offer 23 years of O&M service which is comprehensive. Anything happens during the service period, any component sales we request. I think that proven track record of 30 years and we being here, our product being strong, and we also offer end to end starting from the land to the service business is what now we get this order, especially from the C&I segment. If you see, that's the reason we are strong in C&I and public sector. 75% of order book coming from these two segments. That will continue. As far as your second question is concerned, with ALMM coming in, let's see the fine tune what is coming up. Because we also make castings for all the gearboxes and we also make the bearing rings.
Therefore, with the significant uptake, something in terms of everything to be probably domestically sourced. It doesn't talk about domestic sourcing, but intention is to domestic sourcing. The demand for the components from SE Forge to increase both in terms of bearing rings as well as castings. Both foundry unit as well as the forging unit, both will get benefited.
Thank you sir.
Thank you.
Thank you. The next question comes from the line of Anupam Goswami from SUD Life. Please go ahead.
Hi, good evening sir. What is an estimate of INR 540 crores and that run rate is lower than end of the quarter of last year. Can you throw some lights on this? How do you expect the order intro to build up going forward?
As J.P. sir mentioned earlier, we don't see any slowdown in the order inflows. I mean, you know right that during Q1 it may have been a little less as compared to earlier quarters in terms of new order inflows. That is not a barometer for the quarters going forward. There is a very active pipeline that our team is in advanced stages of negotiation. As per our policy now, you know that any order which is over 100 MW and once we have received confirmed advance from the customer, only at that stage is when we declare the order as a confirmed order.
You will hear about certain active orders that get translated fairly soon into confirmed order.
Okay sir. Also, in terms of slight PPA is getting delayed and cancelled also are you seeing on the shoulder in the next quarter or so and when do you see the pickup may happen?
As I said, our author portfolio 75% comes from the C&I and the PSU segments. Therefore, only 25% come from the bid segment. Every single order what we take in the bid segment which we mentioned earlier is only after the PPA is signed. We don't take any orders where the PPA is not. In fact, even the ITP would not be willing to give the order without the PPA signing, so whatever orders employees happening are all after the PPA signing.
Therefore, there is no uncertainty once the order is booked,
Correct and grid order that 1/4 will. Are we ready for that? We have, we are qualified to take power utilities on it.
We today use 20%-21% of order book is from Central and State Utility segments and NTPC service. We have more than 1.3 GW of order right now. Deepen is one of our single largest client.
Right. Thank you.
Thank you. The next question comes from the line of Prateek Giri from Subh Labh Research. Please go ahead.
Hello. Am I audible?
Yeah.
Greetings Mr. Chalasani. Great numbers. Congratulations Mr. Chalasani. I had my first question on BESS so I just wanted to get your sense, you know, in case the BESS story goes up to say six or 10 hours or any non-lithium storage comes, will the role of wind, since it or wind relevance due to long storage, may change? No, if it counts, that's the question number one if you can help me understand.
Yeah. See, the longer the storage, higher the price of storage. For example, that is what leads to—I don't think the—see, they are quoting—first of all, storage is not limitless.
The story is exploring a velocity and it has a huge amount of issues with respect to subsequently once the flight is over, and I'm not counting all that, but at the current day, even if the prices are coming down, solar-plus-storage cannot replace on the tariff basis the wind. What would happen, as I said, computer back one course will not replace the other one. There will be different combinations potentially. Now, for example, let's take this case of what CRC came up saying that the solar substation is connected during the non-solar hours, they're going to give connectivity for wind or storage and everything. In those cases, it automatically makes sense for the wind and storage. Daytime, whatever is entered in the wind is put in the storage, and the nighttime, anyways, being we have the connectivity.
There are so many things that are happening in the lead level. I really don't see one replacing the other. Because our wind, our load profile country is different and these demands are different. I think all three will coexist in my opinion. It won't happen that one is going to replace the other. One view is that everybody talks about this storage prices being the cheapest in China, and which is a fact. If you go back and look at the capacity, what is happening there? There is a significant addition of capacity of wind, which is impact—they do whatever we're doing in five years, they're doing in one year. If the solar storage is the right case, why should they add wind at all? Because in their case, there is no question of wind not being available. Not being available because they have all the tariffs in here.
From the point of view, it doesn't work that way. It is not just a tariff alone.
Understood. No, this is really helpful. My second question on competitive intensity. We saw the resolution of one of the European players in India recently, probably six, eight months back. Are you seeing incremental competitive intensity in the new orders where we are bidding?
Competition is going to be there, and the number of players is increasing. That aspect is something we can't wish away. It was there earlier, it is there even today. There are more players in the market than there were, let's say, a couple of years back, including the new player we are talking about.
As long as you have the specific product—when you say specific product, it is that service we provide, the entire EPC plus the service business—and with our in-house technology, we do have a differentiation compared to others. How many of them will really stand by for the service business? They might say they will do service, but if you check the track record in the process, there's not even one single OEM, domestic or global, who has a definite offering for service saying that you can use their service. We're the only company that can do the service for the entire 15 GW takeovers and then going for everything else. I think we will build the differentiation while at the same time trying to reduce our cost through various niches and compete in the market. Competition is always there. Yeah, yeah.
Thanks a lot. Thanks a lot.
You have highlighted this point a lot, but please allow me to ask this again, with a little bit of key. Last quarter, I remember you told us the two Indian players in wind turbine generator segment are highly self-reliant in terms of their supply chain, in terms of their component sourcing. Is it fair to assume that this ALMM issue, which is being implemented recently, is done to keep the other folks in check who are basically non-ALMM? Is that understanding correct? Experientially, is this understanding correct, that the two Indian players are entirely self-reliant?
I don't know where from two, I don't remember, but we are completely, we as an Indian company will completely meet the requirement that are coming. Let's understand, the ALMM is not—ALMM is not saying that, you know, somebody from X country or Y country is not ALMM. It is not the case.
What they're saying is that, boss, please manufacture here. Please manufacture. You do whatever business you want to do. You are most welcome to do that. That's what. What they're trying to say is that, okay, we will set the standard for wind components. We have not done this. We only were doing it for the turbine as a whole, as a tax certificate. All these five components now we need to get listed in the ALMM wind components list. If you want to get listed, we will come, we will inspect, we check the quality and everything that listed. Everybody has to take care only from the upward list of component suppliers. This brings in, in terms of level playing. See.
The line for the management has been disconnected. Please stay connected while we reconnect the line.
It.
The line for the management has been reconnected. Hand it over to you. Hello?
Hello? Yeah.
Yes sir, you're audible now. Please go ahead.
You were at the point of a list of approved vendors under this new ALMM.
I was saying that everybody is on the same level playing field with respect to the same list of components. Therefore, there is no advantage of sleeper imports to others .
Very helpful. Congratulations once again, Mr. And congratulations to Himanshu again, you know, for the new state. Thanks a lot.
Thank you.
Thank you. The next question comes from the line of Shiva from Purnartha Investment Advisors. Please go ahead.
Hello. Am I audible?
Yes, sir. Audibility is correct.
Good evening. Thank you for taking our time. First question is with respect to the installation. Just wanted to understand from the thing that the evacuation powers, that is the bottleneck of yours. Could you explain? I mean, what can I mean. Obviously it is a dormant that has to be done or can it be done in any other way? Like C&I or captive have their own way of transiting or is it totally dependent on government for this to happen? What gives us the content going ahead that the evacuation, I mean this aspect of that will improve going ahead? Is it a state to state before that case or is the central taking the entire sustain this entire?
In my case, through Pass 1, evacuation is within the uniform 33 cable system which takes from each substation to the police substation.
The second one is you have to transmission line by the IPP from the pooling substation to the nearest central CPU substation and the CPU substation. These are three areas what I talked about, this ROW or various issues creating a problem with land acquisition, ROW. You see, even the Power Grid faces the same issue in terms of ROW and land acquisition. Everybody is facing the same issue. Having said that, I think whatever delays have happened, happened to them. At least CTU substations are now, with all the delays, are likely to come up. Our expectation, that's why you said that we said that this year we will do 6 GW while we did only 4 GW last year, because these things are easing out and then we should reach 77.3 GW in FY 2027 and put the H9 thereof. Things are easing out.
I don't say it's gone away or we can't wish them away, but there is a consciousness in the government in various areas this needs to be resolved. Problem is there but slowly getting resolved.
Okay, so just to understand, the 4.2 GW or the 1.6 GW that we installed this quarter and fourth quarter last year, which is installed and given power, right? They've already been installed and given.
Our.
Proportionate is slightly lower, right? Like 4.2 was installed at entire level, like 3.3 in FY 2024, 3.3 was installed, indeed installed in 32 megawatts, but FY 2025 and Q1, our installations ratio to India is way low. What is some strength in here?
Because gradually our etc., there we have a full country component has come down. We are depending upon more on the clients eligible to acquire the land into the projects. In fact, in our order book, about 52%, I think at least 78% is the non etc. In that, again, about 52% or 54% is pure equipment supplies. We don't even do erection key for that. One day in the last couple of years, our share has come down, but we expect this year, as we see the things, it's picking up, and we would continue to have a decent share compared, like what we saw earlier.
We always used to be around 24%- 50% or 6% part of the share to be able to reach that level.
Absolutely. Any plans to move towards, because the informations are delaying because we have lesser number of ECT, any plans to test for,
we want to move to EPC. That's the reason last month I mentioned that we are now acting on acquiring the land in advance in different states, but the result of that will come only in FY 2027.
One more thing regarding the ISTS charges. This ISTS charges, which I think 25% can start kicking in . Any rough idea about what are the C&I things which are cross state in our advances or in our orders, or does it have an impact in cross state, or do you think it is surely this 25% is too early.
In fact, still 25% is much cheaper than 100%.
Going ahead after once, because
This is lifelong, remains the rest of the life of the project.
In the case of sun, it shows India stage, but the entire factories will be throughout India. That cost state thing, do you think in the larger school, join the scheme.
simplify it, even after you account for all these transition targets, because the end is much better if you go for renewable energy.
Okay. Just one small character understanding, in the 4.2 GW. This doesn't include captive power that got installed, right?
Sometimes they include, sometimes, but it doesn't make a much difference. C&I, I think, they simply is in that,
the C&I is included. The captive is not included?
Active author should be included. Mostly because this is, they connect, they take it from all OEMs, how much they commission. Data banks are commissioned
earlier.
They were not including bills
connected to the place unless it's the back of the meters as part of 4.2.
Okay, so the power that the Indian government has told that.
Call us please. You know we can connect with you offline if there's any call queries.
Thank you. Thank you sir.
Thank you. The last question comes from the line of Bilal, an individual investor. Please go ahead.
Congratulations to the team for a good set of numbers. Okay, I have my last question here. This year or particularly this quarter, you have installed about 444 MW of power. The installation would be there. That is my first question. The second question is that the delivery general fees are also proportionately increasing as the sales turnovers are going. Is it something that will keep on increasing as the revenue goes up or at some point of time will it destabilize? These are my two limited questions.
Thank you. Inventory, of course, in overall terms, in INR crore terms, is bound to go up. What we monitor and we've been giving guidance on is the net working capital, and inventory forms a part of it. Currently, we are give or take anywhere between 90 to 100 days, which used to be about 120 days at one point in time.
Directionally, we said that we are looking at reducing that and bringing it down close to about 75 days. The trajectory towards that is very much on. Looking at inventory share in INR crore terms on an absolute basis will increase because of the order book and the inflows that we have.
Question at this point. Sorry, just to interrupt. Small question: do you recognize the revenues the moment you move components and everything out of the factory and you raise the bill, or is it only recognized at the time of once the installation is commissioned and everything is complete?
No. When we say that revenue recognition, we do it at the time of the entire equipment being dispatched from our factory premises. That's when the revenue recognition of the equipment is done. What is linked to various milestones is payments.
Upon dispatch from the factory, upon commissioning of the turbine, that is a linkage of the payment. What invoice is raised upon price of,
so that will come into receivable. Then inventory and all kind of,
it is receivable to come to receivable.
Actually, the quarter-to-quarter variation will always be as a new year. We gave a guidance of 60% growth with us look at the years because if you look at each year, the quarter varies, some quarter. Let's look at the year basis, year basis test, it will be mounted.
Thank you, ladies and gentlemen. On behalf of Suzlon Energy Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.