NewsEarningsIndowind Energy Reports Q2 Results with Auditor Qualifications on Credit Loss and Arbitration ClaimsIndowind Energy Reports Q2 Results with Auditor Qualifications on Credit Loss and Arbitration Claims
Indowind Energy Limited announced Q2 FY24 results with 11.46% YoY revenue growth to ₹1,774.33 lakhs and 3.62% PAT increase to ₹457.71 lakhs. However, auditors raised concerns about non-recognition of ₹248.13 lakhs in expected credit losses and accounting treatment of a ₹9,083.39 lakhs arbitration claim against Suzlon Group. The company approved a rights issue to raise up to ₹49.43 crore, offering 3,22,00,434 shares at ₹15.35 each in a 1:4 ratio.
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Indowind Energy Limited , a prominent player in the renewable energy sector, has announced its unaudited financial results for the quarter ended September 30. The company's performance comes with notable auditor qualifications, highlighting potential financial concerns.
Financial Performance
For the quarter ended September 30, Indowind Energy reported the following consolidated results:
| Particulars | Q2 (₹ in Lakhs) | Q2 PY (₹ in Lakhs) | YoY Change |
|---|---|---|---|
| Revenue from Operations | 1,755.40 | 1,580.82 | +11.04% |
| Total Revenue | 1,774.33 | 1,591.89 | +11.46% |
| Total Expenses | 1,321.17 | 1,188.17 | +11.19% |
| Profit Before Tax | 453.16 | 403.72 | +12.25% |
| Profit After Tax | 457.71 | 441.70 | +3.62% |
The company's revenue from operations saw an 11.04% year-over-year increase, while the total revenue grew by 11.46%. The profit before tax improved by 12.25%, although the profit after tax showed a more modest growth of 3.62%.
Auditor Qualifications
The financial results come with significant auditor qualifications that investors and stakeholders should note:
Expected Credit Loss Allowance: The auditors have raised concerns regarding the non-recognition of expected credit loss allowance amounting to ₹248.13 lakhs. This pertains to receivables from TNEB Tirunelveli and BESCOM.
Arbitration Claim: The auditors have highlighted issues with the accounting treatment of a substantial arbitration claim against Suzlon Group, amounting to ₹9,083.39 lakhs.
These qualifications suggest potential financial risks and uncertainties that may impact the company's financial position and future performance.
Balance Sheet Highlights
As of September 30, Indowind Energy's consolidated balance sheet shows:
| Particulars | September 30 (₹ in Lakhs) | March 31 (₹ in Lakhs) |
|---|---|---|
| Total Assets | 32,402.01 | 30,539.78 |
| Total Equity | 28,676.61 | 27,961.21 |
| Total Liabilities | 3,725.40 | 2,578.59 |
The company's total assets have increased by 6.10% since the end of the previous fiscal year, while total equity has grown by 2.56%.
Cash Flow and Liquidity
The cash flow statement reveals:
- Net cash used in operating activities: ₹(323.16) lakhs
- Net cash used in investing activities: ₹(193.31) lakhs
- Net cash generated from financing activities: ₹524.84 lakhs
The company ended the period with cash and cash equivalents of ₹179.91 lakhs, compared to ₹171.54 lakhs at the beginning of the financial year.
Rights Issue Announcement
In a separate announcement, Indowind Energy has approved a rights issue to raise up to ₹49.43 crore. Key details of the rights issue include:
- Issue of 3,22,00,434 fully paid-up equity shares
- Rights issue price: ₹15.35 per equity share
- Rights entitlement ratio: 1:4 (1 new share for every 4 shares held)
- Record date: November 19
- Issue period: December 1 to December 9
This rights issue may provide the company with additional capital for its operations and growth initiatives.
Conclusion
While Indowind Energy has shown revenue growth and profitability in the reported quarter, the auditor qualifications raise important questions about the company's financial management and potential risks. The non-recognition of expected credit losses and the accounting treatment of the arbitration claim are areas that may require further scrutiny and resolution.
The upcoming rights issue may strengthen the company's financial position, but investors should carefully consider the auditor's qualifications and the company's plans to address these concerns before making investment decisions.
Stakeholders are advised to monitor the company's future disclosures and management's responses to the auditor's qualifications for a more comprehensive understanding of Indowind Energy's financial health and prospects.
Historical Stock Returns for Indowind Energy
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.01% | -7.41% | -14.76% | -30.92% | -46.89% | +301.75% |
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