Why Suzlon stock may under perform the bourses in the coming few days?

Having showcased its operational efficiencies very recently, in March '12, Suzlon Energy's financial performance for the first quarter of the June' 12 is nothing but shocking. The company has reported a huge consolidated net loss of Rs 849 crore against a profit of Rs 60 crore reported by this company in the June '11 quarter. With the company having announced its results after market hours, the current quarter's performance is unlikely to gel well with the investors when the markets open tomorrow, especially when the stock gained 2.6% on Monday, anticipating better results from the company.

Suzlon Energy's Stock is likely to under perform the markets in the coming few days, and here is the reason why...

1. The company has reported huge losses, even at the operational levels, both in the standalone as well as the consolidated accounts.

2. A modest 9% growth in consolidated revenues failed to compensate 29% rise in the overall expenditure

3. The consolidated operating margins resultantly dipped from 11.2% a year ago to -5.4% for the June '12 quarter

4. This significant decline in consolidated operational profitability has set the eyes rolling on REpower's performance, which was spearheading Suzlon's performance so far.

5. Interest costs continues to be a huge burden on Suzlon's financials and accounted for over 10% of its sales. A year before the same had accounted for less than 7% of sales.

6. While the management has claimed some of its senior secured lenders has reduced interest rates by 2.5%, the same shall get reflected only in the forthcoming quarters.