Suzlon Battles Pressure On Margins

Suzlon Energy is in a trans, its acquisitions have not yet started to add to earnings, the employee additions during the quarter are adding to costs and, worse, the rupee is throwing it''s weight around putting pressure on the company''s margins and Q1 performance.Suzlon is paying high interest amounts as acquisition cost of REpower and Hansen, while the REpower revenues are still to start trickling in. The company is paying Rs 13 crore and Rs 28 crore as interest costs for Repower, Hansen respectively.

First quarter is traditionally weak for Suzlon Energy and the company is expected to gain steam from the next quarter, also a big difference will be the inclusion of REpower numbers.While consolidated sales in Q1FY08 stood at Rs 1,944 crore the company posted a net profit of Rs 18.89 crore. In the first quarter Hansen contributed Rs 3 crore as profit to Suzlon. All eyes are now on Suzlon Energy''s next quarter results when RE Power''s revenues will reflect on it''s balance sheet. Moreover the company is ramping up its international business. In Europe they are expanding on the back of REpower and also have identified South Africa as one of the destinations for lucrative business.