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Suzlon : Headwinds - Retrofitting blades will hurt the firm's profits
March 4, 2008 by Shobhana Subramanian & Amriteshwar Mathur in Business Standard
March 4, 2008 by Shobhana Subramanian & Amriteshwar Mathur in Business Standard
The world's fifth largest wind turbine manufacturer is in a bit of a spot. The Rs 7,985 crore Suzlon Energy will have to incur a cost of Rs 100 crore for retrofitting blades. Essentially, about 1251 blades will need to be structurally reinforced and the firm may need to spend additionally on higher warranty provisions and increased raw material costs.
Moreover, there could be a slippage in volumes, later on, due to delays in execution. All this, say analysts, could shave off anywhere between 14-17 per cent from the company's earnings between FY08-10.