Revenue Slide

Quarterly results of select solar and wind power companies

By Sarthak Takyar

Renewable energy companies are facing increasing financial pressure. Their profit margins are shrinking owing to falling tariffs; meanwhile, the cost of domestic finance continues to be high. While tariffs have stabilised somewhat over the past few tenders, access to competitive finance is still a major hindrance. The depreciation of the rupee has added to developers’ woes as they are dependent on imports for various equipment. Policy and regulatory uncertainties have also created a higher risk scenario in the industry. Broadly, these are the issues that have been adversely affecting the balance sheets of renewable energy companies. Over the years, policymakers have addressed a number of issues and developers too have learnt to tackle some uncertainties, but there is still huge scope for improvement on both fronts.

Renewable Watch takes a look at the financial results of select listed renewable energy companies for the quarter ended December 31, 2018, and analyses the key developments that could impact their financials in the future…

Azure Power

The company’s revenue for the third quarter ended December 31, 2018 was Rs 2,430.8 million, an increase of 40 per cent over the corresponding quarter in 2017, and an increase of 9.2 per cent over that in the second quarter ended September 30, 2018. The net profit during the quarter ended December 31, 2018 was Rs 143 million compared to a net loss of Rs 50.7 million in the same quarter in 2017, an improvement of 382 per cent. This was primarily due to an increase in revenue from the company’s recently commissioned projects. The positive results notwithstanding, the depreciation of the rupee against the US dollar continued to impact the company’s financials. The foreign exchange loss during the quarter ended December 31, 2018 increased by Rs 108.7 million compared to the same period in 2017.

Inox Wind Limited

The company has shown tremendous improvement in its financials over the past year. Its total income increased from Rs 947.3 million for the quarter ended December 2017 to Rs 3,944.5 million for the quarter ended December 2018, marking an increase of around 316 per cent. Also, from a net loss of Rs 461.2 million in the quarter ended December 2017, the company registered a net profit of Rs 1,520 million and Rs 17 million in the quarters ended September 2018 and December 2018 respectively.

Winning new projects continuously seems to be a reason behind the company’s strong balance sheet. Since December 2017, the company has won bids to develop wind power projects in various central and state tenders. In the quarter ended December 31, 2018, the company received a letter of intent from Adani Green Energy to supply, erect and commission its 3.3 MW wind turbine generators with a 145 metre rotor dial and 100-120 metre hub height for 501.6 MW of wind power projects located in Kutch district of Gujarat.

Orient Green Power Limited

Orient Green Power Limited (OGPL) posted better results in the quarter ended December 2018 compared to those in the previous quarter, owing to the successful implementation of its plans to disinvest its eight biomass subsidiaries to Janati Bio Power at a price of Rs 490 million.

The company’s consolidated net profit rose by 96.4 per cent from Rs 355 million in the quarter ended September 2018 to Rs 697 million in the quarter ended December 2018. It, however, reported a net income of Rs 336.3 million in the third quarter of 2018, a 77.5 per cent decline  from a net income of Rs 1,497.6 million in the preceding quarter.

Suzlon Energy Limited

The company reported a net loss of Rs 2,850 million in the quarter ended December 2018, which was 54.6 per cent lower than that in the previous quarter. Its total income declined by 9 per cent to Rs 11,120 million during the same period. However, compared to the December 2017 quarter, the company’s income has reduced by almost 50 per cent.

A key highlight for Suzlon during the quarter was the successful completion of its second wind power project for Hindustan Aeronautics Limited. The 8.4 MW captive wind energy project is located at Kushtagi in Bagalkot district of Karnataka. Suzlon is also responsible for comprehensive operations and maintenance of this project for an initial period of 10 years. The company won several new orders in the quarter ending December 2018. It will install 156 units of its S120-140m wind turbine generator, of a rated capacity of 2.1 MW each, for Adani Green Energy under two different auctions. The projects will be located in Kutch, Gujarat.

Suzlon also won an order for the development of a 50.4 MW wind power project from Atria Power. It will install 12 units of its S111-140m wind turbine generator and 12 units of its S120-140m wind turbine generator with a rated capacity of 2.1 MW each. The project will be located in Tuticorin, Tamil Nadu, and is at an advanced stage of development.

By March 2019, Suzlon may reportedly sell its entire stake in two special purpose vehicles (SPVs), Gale Solarfarms Private Limited and Tornado Solarfarms Private Limited, to CLP India Private Limited. As the first part of the transaction, CLP has agreed to acquire 49 per cent stake in the SPVs for Rs 234.9 million and Rs 155.7 million respectively. The SPVs had been created for the development of a 70 MW solar power project in Maharashtra.


Like most industry players, Azure Power was hit hard by the depreciation of the rupee. Despite this setback, the company is now on an even keel owing to its growing solar portfolio.

Inox Wind Limited has reported poor financial results for the quarter ended December 2018 compared to the preceding quarter. In the past few fiscals, the company has witnessed variations in its financials. It was severely impacted by the transition to competitive bidding in the wind energy segment from feed-in tariffs. In 2017-18, it had reported a net loss of Rs 1,876.1 million against a net profit of Rs 3,032.9 million in 2016-17, a decline of over 161.86 per cent in its profit after tax. However, in the quarter ended September 2018, the company reported a net profit of Rs 1,520 million.

For OGPL, the disinvestment of its biomass business seems to have worked well. The company has almost doubled its net profit compared to the preceding quarter.  Despite its poor results, Suzlon’s investments in new technologies in the wind energy space are helping it weather turbulent times. Moving forward, the company’s focus on its core wind energy business and gradual disinvestment of its solar portfolio bodes well for the company and its stakeholders. The likely sale of its solar portfolio and a strong wind order book of over 10.7 GW are expected to positively impact the company’s revenues, which have been on a downward spiral over the past few quarters.

Overall, the net income of the companies under review declined in the quarter ended December 2018 as compared to the previous quarter. However, all these companies, except Inox Wind Limited, reported a higher net profit. Going forward, the the goods and services tax rate of 5 per cent, greater focus on transmission infrastructure enhancement, the favourable land policy released by the Gujarat government and the spike in tendering activity will give a fillip to the renewable energy sector. The impact of these developments is likely to be reflected positively in the quarter ended March 2019.


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