From Wind Turbines To Full Renewable Energy Player

[00:00:00] Speaker 1: Hello, welcome to you watching Business Today. This is Asta Chopra. Well, now today we are talking about a company, a wind energy company, Suzlon, who is not only transforming itself to other renewable energies, but also being a major player in the Indian. Let's talk about it. And we have a very special guest with us, Mr. Ajay Kapoor, who is the CEO of Suzlon. Thank you so much, sir, for speaking to us. And many, many congratulations on the rebuilding of the brand. Thank you. So for like more than three decades, it was only, Suzlon was only the wind energy. How do you know that this is the correct time to transform it and gather all the renewable energies in your brand this time? [00:00:36] Speaker 2: Thank you so much. It's a great question. We are today standing at a cusp of, you know, electrification of the world. We have seen how the recent crisis in the Iran and earlier with Russia, Ukraine, immediately led into a sudden spurt in the prices of energy. We are seeing how an ordinary Indian is suffering whenever there is a challenge on the national energy security. Fortunately, as a nation, we have embarked on a journey to go more and more into the renewal space. Today, as I speak with India, having ambition also to hit 30 billion, 30 trillion economy, it cannot do without energy security. Absolutely. And the whole world is also transitioning towards that. Today, the question is not about whether we should go to the RE. The question is how fast we can go. And people have even forgotten to look at the economies. They believe that first is a security and then the math starts. So I believe this is the right time. Suzlon, as you know, has been a champion and championing the cause of wind energy in India from the early days to the leadership that it has established. We believe when we look at the end users, our consumers today, they are happy with the wind portfolio that we serve them, but we are still not covering the entire spectrum. We are still not participating in the entire changing ecosystem. Suzanon 2.0 gives us that opportunity to keep wind at the core and then bring the adjacencies of solar, battery storage and energy management solutions. At the same time, solve some of the core issues of wind energy and wind turbine business. Suzanon 2.0 addresses all those and looks at a little more long term view. [00:02:38] Speaker 1: Suzanon 2.0 also have a target like sales of 10 gigawatts by FI 31. So it was in your release. So how much of this will come from the wind section versus the other businesses like solar and storage? [00:02:51] Speaker 2: Suzanon 3.0 again, very good question. We are we did two and a half gigawatt this year, which was a growth of almost 55% over the last year. Suzanon 3.0 now when we are looking at next five years, we are looking at 10 gigawatt of RE sales. Suzanon 3.0 as I mentioned earlier, this largely would be wind. So you can safely take about 75% of this should or 70% roundabout should be wind. Suzanon 3.0, but we are still looking at a larger, you know, 10 gigawatt and within that largely wind. Suzanon 3.0 and then on top of it, we are looking at a three gigawatt of order intake from our international business. That's also wind. [00:03:33] Speaker 1: Okay, so you like basically describe it a wind first company rather than the wind only company now. So what does that distinction mean in the practical business terms? [00:03:43] Speaker 2: Suzanon 3.0 basically what we are saying is wind remains the core and we remain a RE tech wind first company, which will solve the FD RE requirements of the customers and with the entire stack, I think the levelized cost of energy is what we are addressing. Suzanon 3.0 and also making sure that the RE energy security for our customers is also serviced through the strategy. [00:04:12] Speaker 1: Okay, so let me understand in the investor's perspective now, like many investors are calling Suzanon 1, the India's biggest corporate turnaround stories. So what in your view was the single most important factor behind this revival and debt reduction and execution discipline or it was the wind market itself like the sector wise? [00:04:33] Speaker 2: Suzanon 3.0 again, great question. You know, when today is about 53 gigawatt demand, we believe with all the estimates that you have studied, this can very well reach another 100 gigawatt on top of it. Current run rate last year installations were close to six and a half gigawatts. We believe it can increase to eight current year and another 10 in the following year. But I'm more excited is a little midterm position. If I take in five years, I believe this market can easily hit 13 to 15 gigawatts. Suzanon, as you know, is a leader in the wind sector. And I'm very happy the way the company has, you know, performed over the last three years. Suzanon 3.0 again, as I mentioned, is a, you know, cash positive. We are sitting on 2,400 crore of cash, which is 400 crores more than last year and zero debt going forward. Suzanon 3.0 again, as I said before, you know, we would like to continue to grow, but without putting too much pressure on debt, this growth will largely be through our internal accruals. Suzanon 3.0 and the whole strategy is also asset light. [00:05:52] Speaker 1: Okay. So, let me also focus before we wrap up on the other sides of the business as well. So, it also plans to establish BES manufacturing facility by 2027. Can you just tell us more about that also because there are a lot of competition coming from other countries as well. So, how do you plan to stand out in this sector? [00:06:10] Speaker 2: So, again, you know, core to our strategy is a wind-led RE tech company, which solves customers' energy requirements. So, we will not go and do standalone BES and we will not go and do standalone solar. However, for the customers who are, you know, where we are selling our wind turbines, we will serve them 100%. So, if they want solar, we will bring solar partnership there. Got it. If they themselves are doing, we can join hands. Otherwise, we will have partnerships which will come and work with us at the right cost, obviously for the customer. And BES will put a 3 gigawatt plant. We might also do a little bit more on tolling. Okay. So, that could take it to about 4 gigawatts. That's the starting point. Okay. And once we are into the business, we will keep evolving and reshaping. But today in the Suzanon 2.0, we are looking around 3+1, 4 gigawatt of BES. [00:07:05] Speaker 1: Well, okay. It was lovely talking to you. Just one more open-ended question before we close this. What are your expectations and target, like say, at the next FI? [00:07:15] Speaker 2: Great question. Again, my answer is, India's growth story is intact. Within that RE sector is outperforming. As we have seen in the last few years, wind would continue to grow. If wind goes from 6.5 to 8, it's an ample room for Suzanon to participate in that growth. Last year, we had a good growth on our revenue. We have done better year-on-year on our installations. A lot of installations face challenges which are beyond our scope sometimes. Like, for example, the power evacuation, which is not in our scope in many of the contracts. I am very confident that in time to come, a lot of those turbines which have been erected but not yet installed or commissioned as we call it, we will see that happening. So, therefore, it should be a good year for us. We will continue to preserve, protect and grow our margins. [00:08:13] Speaker 1: Well, thank you so much. It was lovely speaking to you beyond these geopolitical tensions. It's lovely to see companies coming up for India to be standalone in some of the sectors. Thank you so much. It was very nice talking to you. Thank you so much for explaining and inviting us. We hope to see you very soon. Thank you, sir. Thank you so much. [00:08:29] Speaker ?: Thank you. [00:08:47] Speaker 1: If you like the video, do like, comment, share and subscribe. [00:08:55] Speaker ?: Thank you.