Tue Jan 30, 2007 2:20 PM IST
(Corrects value of BP order in ninth paragraph to $45 million from $56.4 million after company corrected figure)
By Hiral Vora
MUMBAI (Reuters) - Indian wind turbine maker Suzlon Energy Ltd. reported a lower-than-expected 8 percent rise in quarterly profit on Monday, mainly on stronger rupee and lower margins, sending its shares as much as 7.2 percent lower.
The company said margins in the first three quarters at 17 percent were below its target of 22 percent, but were likely to improve in the current January-March fiscal fourth quarter.
"The gap will be reduced in the fourth quarter and we hope to come on track by the end of this (fiscal) year," Chairman Tulsi Tanti told Reuters in an interview.
Suzlon, the world's fifth-largest wind turbine maker, said net profit rose to 1.72 billion rupees ($39 million) for the three months ended Dec. 31, from 1.6 billion a year earlier.
"An appreciating rupee and lower margins from our overseas assignments affected our third quarter earnings this time," Tanti said.
The rupee rose nearly 4 percent against the U.S. dollar in October-December, slowing earnings growth in rupee terms.
Suzlon, whose revenue mainly comes from sales to Europe and the United States, faced logistical road-blocks with many shipments remaining in transit during the quarter, he said.
"We lost about 350 million rupees this time because of transit inventory," Tanti said.
He said the company's order book stood at $1.74 billion including a $45 million order from BP Plc, which is building a wind farm project in Maharashtra.
A BP spokesman said the project was part of the company's focus on renewable energy.
Suzlon's shares ended 6.4 percent lower at 1,204.75 rupees, after falling to as low as 1,195 in a weak Mumbai market.
"The results are clearly below our expectations mainly because it reflects a slower pace of growth," Mehul Mokati, a sector analyst with Emkay Share and Stock Brokers Ltd., said.
"Interest payments also seem to have shot up greatly in this quarter," he said.
Suzlon's Belgian subsidiary Hansen Transmissions will invest $220 million to build a wind turbine gearbox making facility in Coimbatore, he said.
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