Green Portfolio: Suzlon sizzles and Q-Cells misses

May 12, 2009

Indian wind turbine maker Suzlon Energy’s shares gained 8 percent on Tuesday, after sources told Reuters that Suzlon’s founders are looking to raise up to $48 million through the sale of a 2 percent stake in the world’s fifth-largest wind turbine maker.

Shares in leading solar cell maker Q-Cells closed the day up 2.39 percent after it reported profits that missed market forecasts and CEO Anton Milner and CFO Hartmut Schüning tried to assuage investor fear over solar project funding.

German solar peer Solon posted a bigger-than-expected first-quarter net loss and echoed Q-Cells’ financing concern.

(Track and comment on the emerging greentech sector by joining the Reuters Business of Green Portfolio community)

2 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

SUZLON
Dated 21th August 2009

The demand for wind energy is INFINITE !!!
Very soon there is going to be some sort of a global legislation calling for a ban on thermal coal based and also gas based power plants. Thereby implying that a substantial capitalization currently deployed in companies like NTPC, Reliance Power, TATA Power, Adani power etc will shift to wind energies like Suzlon and Indowind Energy. Coal based power generation plants are adding to carbon emissions, adding to ash pollution and also depleting the already scarce water recourses.

Have you ever wondered why Adani Power got a thums down on ITS listing today and that Reliance Power has gone substantially below its issue price … ANSWER: Because smart money is slowly moving out of thermal based power generation plants. The smart investors are intelligent enough to understand that the coal based power plants will need a minimum of 3 to 4 years to constructed and commissioned and by that time there would already be enough global threatening voices calling for a total shutdown and permanent dismantling of such environmentally hazardous power generation plants. In the last one year China has shut down more than 330 thermal coal based power generation plants and before 2020 USA has vowed to have at least 20% of its electricity from wind energy.

As of now in terms even Azim Premji of Wipro is talking of diversifying only into Renewable Energy as per his interview in CNBC TV18 a week back … Why ? Because he is an intelligent man and that he knows Wind Energy is the absolute future.

After a very vast review of literature I come to the conclusion that today 20 August 2009, irrespective of its Rs 13000 crore debt the Rs 2 paid up share of Suzlon needs to be valued at a price of over Rs 500. So why is Suzlon moving near price of Rs 40 per share … because the people are fools … and they do not understand that WIND ENERGY is the priority of the world today.

I am a scientist and as per my mathematical analysis including complex algorithms (equations) for every 1 mm rise in the height of sea water there is going to be an associated one foot rise in the future high tides. About a 20 days back, that is in the month July 2009 people had gathered in a picnic mood at India Gate Mumbai to witness the highest tide of the century the said tide being 4.25 meters high, and at that time the sea water was only 2.5 inch below the parapet of india gate. By next year July with the polar ice melting fast due to global warming the sea water would rise by at least 3 mm, thereby implying that during the high tide in July 2010 the lobby of Taj Mahal and Oberoi Hotel in Mumbai would be at least 3 feet under water intermittently for 7 to 8 hours. Next year or the year next when cities like Mumbai and New York start to submerge is water at least during the high tide then CNBC TV 18 would invariably be devoting 4.5 hours out of the 5 hours to only companies involved in Renewale Energy like Suzlon and Indowind energy. A few days back I heard on CNBC TV18 the CEO of Mozer Baer saying that they are making active steps to enter Renewable energy.

CONCLUSION: Sell all your shares related to thermal power such as NTPC, Reliance power, Adani Power, TATA Power, GVK and invest the proceeds as follows:
80% in Suzlon
20% in Indowind energy

… Why? The good will value of the technical know how in wind energy which has been acquired by Suzlon and Indowind Energy is much more than the total existing capitalization of these companies. Suzlon is down to Rs 40 from Rs 1300 only for its blade cracking problem, but I thing that this is an asset and not a problem to Suzlon because they have learnt the hard way and obviously they shall not commit this mistake again. Further it takes 12 large trucks to transport each wind mill like the one made by Suzlon and in such a scenario other companies like Vesta and GE can never take Suzlons market share in Asia.

Also within one year from now that is by Aug 2010 you will start hearing the ominous rumblings from global bodies such as the UNO and the developed countries that all countries need to dismantle their thermal coal or gas based power plants, come what may be the consequences. In such a scenario would you like to keep invested in companies like NTPC, Reliance power, Adani Power, TATA Power. Well I would rather take my money out of these companies right today and I would rather start going short on these companies each time the share value of any of such company goes up. However I shall so arrange that am able to maintain my short position for at least 3 years.

One more thing, time will show that Tulsi Tanti of Suzlon will never sell his holding in Hansen given the choice … that is why he is looking towards divesting in SeForge.

ULTIMATE CONCLUSION: If Suzlon is able to divest in SeForge and show a Q2 net profit of even Rs 50 crore (after accounting the servicing of the rest of the existing debt) its share value will cross Rs 500. And I firmly believe that in Q2 2009 (just wait till Sep 2009 when the Q2 results are announced) you shall see a Q2 net profit of about 150 crore.

Posted by A climate conservationist | Report as abusive

I too believe strongly in renewal energy which is the demand currently felt by the world community. But i guess the share price of suzlon shall move only if they show some profits and growing order book. Because technically, if demand for crude remains low, the demand for wind energy would also not increase due to low crude consumption by the world. Traditionally, it has been observed that whenever crude becomes costly, only then the companies look towards cheaper energy generation options such as Wind. But if the UNO makes noise, good for the world, to use renewable energy(i also suspect it to happen soon), certaly SUZLON share price shall soar away.

Posted by Ratish | Report as abusive