Suzlon to sharply grow EPC business for better margin, starts acquiring land

As part of a strategy to improve its core business and to scale up competitive advantage as well as margins, wind turbine manufacturer Suzlon Energy Ltd., has decided to sharply grow its engineering, procurement and construction (EPC) business in the coming years.

“We want to increase our EPC share in the overall business to 50% from the current 20% [out of the total 6.5 Gigawatts] so that it gives us competitive advantage. It will give us control on the project execution. It will further improve the number of turbines to be produced. We are working on different aspects of further growth beyond FY26,” J.P. Chalasani, Group CEO, Suzlon Energy said in an interview.

In EPC, the company does everything on turnkey basis for a client, starting from land acquisition to the completion of the project and operational maintenance. In the normal course of business since the company completely depends upon the client it had decided to move to EPC, he said. He said the company had already started land acquisition for the purpose.

“We have identified potential wind sites across six States for about 23 gigawatts. And then we started land acquisition for about 7.5 gigawatts,” he said.

“EPC will give us control on the project execution. So, we can do a faster project execution because land is in advance and we have the full control. This would lead to faster execution, meaning more turbines supplied,” he said.

“And more importantly, this becomes a significant competitive advantage to us because nobody, no one else in this country would offer EPC,” he emphasised.

Commenting on the GST cut from 12% to 5% on wind turbines, he said it would create more demand as the tariff for wind is reduced by about 15-16 paise. On the demand scenario he said, “We are on the sweet spot today and also due to demand on account of growth in GDP.” “Also because of green hydrogen and data centres are coming, the growth for renewable energy is going to be strong,” he added.

Having witnessed a “good” first half, the company is looking for continuous improvements in the second half and beyond.

“The Q2 and H1 remained good. At the beginning of the year, we gave guidance that we will do 60% growth over last year in every parameter. We still maintain that. As of end of H1, our revenues grew by 70% and our EBITDA and profit both doubled. In spite of the fact that we supplied a large amount of turbines, the order book stands at 6.2 gigawatts at the end of September,” he said. In Q2, Suzlon reported a six-fold YoY rise in net profit to ₹1,279 crore.