Synergy Green Management Discussions



The report contains forward-looking statements, identified by words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates and so on. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. The Company disclaims any obligation to update these forward-looking statements, except as may be required by law.


The wind industry has enjoyed its third-best year. Nearly 78 GW of wind power capacity was added last year, the lowest level in the past three years but still the third highest year in history. This was achieved despite a challenging economic environment and a disrupted global supply chain, compounded by global health and energy crises. Globally, 77.6 GW of new wind power capacity was connected to power grids in 2022, bringing total installed wind capacity to 906 GW, a year-on-year (YoY) growth of 9%. The onshore wind market added 68.8 GW worldwide last year, with China contributing 52%. Additions were 5% lower than the previous year. The slowdown in Latin America, Africa & the Middle East is partly responsible for the decline, but the primary reason is falling installations in the US. Despite finishing the year with a strong final quarter, the US wind industry commissioned only 8.6 GW of onshore wind capacity in 2022, due in part to supply chain constraints and grid interconnection issues. 8.8 GW of new offshore wind was fed into the grid last year, bringing total global offshore wind capacity to 64.3 GW by the end of 2022. New additions were 58% lower than the bumper year of 2021 but still made 2022 the second highest year in history for offshore wind installations.

The unprecedented twin challenges of ensuring secure and affordable energy supplies and meeting climate targets have propelled wind power development into an extraordinary new phase of ever faster growth. After a challenging year, the global wind market is ready to bounce back in 2023, exceeding 100 GW for the first time.

The worlds top five markets for new installations in 2022 were China, the US, Brazil, Germany and Sweden. Altogether, they made up 71% of global installations last year, collectively 3.7% lower than 2021. This was primarily due to the worlds two largest markets, China and the US, losing a combined 5% market share compared with the previous year the second consecutive year that both countries have lost market share.

In terms of cumulative installations, the top five markets as of the end of 2022 remained unchanged. China, the US, Germany, India and Spain together accounted for 72% of the worlds total installed wind power capacity, as in 2021.


India eyes global wind energy supply chain opportunities as it targets growth in capacity additions. In the midst of global uncertainty caused by the global COVID pandemic, the Russia-Ukraine war and recessionary pressures, Indias continued political stability has provided strong support for the countrys climate commitments. India has prioritized renewable energy, including wind power, in its long-term vision for transformation lifting expectations for a wind sector that experienced a slowdown in capacity additions in the recent past.1 Indias Central Electricity Authority (CEA) projects Ex-Bus electricity demand to grow 75% by 2031-32 from 2021-22 levels, and 170% by 2041 42. Demand is projected to increase by more than 90% in four out of the eight windiest states by the start of the next decade. The World Energy Outlook 2022 estimates demand to triple between 2021 and 2050.

India aspires to be a 5 trillion USD dollar economy by 2025 and aims to grow manufacturing GDP 15-fold between 2021 and 2047. It is also committed to achieving net zero by 2070. Renewable energy (excluding large hydro) already represents nearly 30% of Indias installed power generation capacity, at 410 GW, with 10% of this capacity being wind energy. The combined impact of economic growth, net-zero goals and burgeoning electricity demand will result in a rapid increase in the share of renewable energy in the power generation mix. For wind power, Indias target is to achieve a cumulative 140 GW of capacity by 2030.

How Indian wind policy reforms will accelerate growth:

In 2022, India awarded 2.25 GW2 of standalone and 2.45 GW of hybrid wind capacity through auctions. It commissioned a total of 1.8 GW of onshore wind power capacity.3 Recent policy reforms are likely to further boost demand for wind power and accelerate capacity additions over the coming years.


1. 2. As per IEAs Advanced Pledges Scenario 3. Through its Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, the government aims to curb the issue of delayed payments hampering the financial health of green power generators. It has also laid down the Electricity (Promoting Renewable Energy through Green Energy open Access) Rules, 2022 to support the uptake of green power and the Draft National Repowering Policy for Wind Power Projects, 2022 to tap opportunities for repowering.


Creating a market for onshore wind

The Ministry of New and Renewable Energy (MNRE) has outlined a wind-specific renewable purchase obligation (RPO) trajectory to 2030, with an annual target of an 8 GW onshore wind tender every year between 2023 and 2030 based on a single-stage two-envelope bid system.

The plan is to harness the massive wind energy potential of eight windy states: Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and Telangana To support the development of power evacuation and transmission infrastructure, the Central Electricity Authority (CEA) has published its transmission planning report for the integration of renewable energy, including 58 GW of wind energy of which 10 GW is offshore Tamil Nadu and Gujarat to the Inter-State- Transmission-System (ISTS) by 2030. However, the planned infrastructure may not be sufficient to accommodate MNREs target of 8 GW per year.

Creating a market for offshore wind:

In 2022, the MNRE published a strategy paper outlining a tender trajectory of 37GW of offshore wind by 2030. Together with the Danish Energy Agency, it also published a conceptual plan with a pipeline of 15 offshore wind projects. Additionally, the Center of Excellence on Offshore Wind and Renewable Energy, jointly set up by the Danish government and the MNRE, published reports on maritime spatial planning that build on earlier FOWIND and FOWPI projects Creating a market for offshore wind in India demands a strong partnership between the government, development finance institutions, commercial banks, the offshore wind industry, and local communities. Developing India as an attractive offshore wind market further requires the introduction of appropriate standards, such as environmental impact assessment (EIA) guidelines, and support for energy offtake while ensuring the competitiveness of offshore wind.

Micro, small and medium enterprises (MSMEs) play a pivotal role in the Indian wind manufacturing sector. Going forward, the government should consider targeted production-linked incentives for companies currently engaged in the onshore wind sector, and for those wishing to get involved in offshore wind manufacturing. India is in a unique position to leverage growing export and international service opportunities in the APAC and European regions. A strategic supply chain impetus is pivotal to scaling up Indias wind manufacturing sector.


Your Company mainly caters to the domestic & overseas OEM buyers in Wind segment such as Vestas Wind Technology India Pvt. Ltd., GE India Industrial Pvt. Ltd, Siemens Gamesa Renewable Power Pvt. Ltd., Senvion Wind Technology Pvt Ltd and contributes around 70% of revenues. Company also serves to Top wind gear box manufacturers like ZF Wind & Flender Drives and contributes 15% of revenues. Balance of the 15% revenue is coming from non-Wind customers like Terex India Pvt. Ltd., Ferromatic Milacron, and Pump Industry customers. In the financial year 2022-2023, your Company recorded total income of Rs.290.15 Crores as against Rs.284.92 Crores in the previous year and thereby recorded a marginal increase of 1.84% in the net sale. Sales growth was impacted due to 41% drop in our largest customer M/S Vestas revenue because of commodity crisis and global inflation issues. However, increase in M/S Siemens Gamesa revenue by 130% and new Customer addition like M/S Senvion has helped in bridging above revenue drop.

For FY 2023-24, Vestas & Siemens Gamesa revenues are forecasted to be stable and growth is expected from GE & Senvion. There is also potential to add new customers like Nordex, Envision & Renew Power. Considering the present order book and potential opportunities, revenue growth during next two years is estimated at 25%.

During last two years, PBDIT margins were impacted due to continuous rise in commodity prices and lag in reflecting with customer prices. During the year, absolute PBDIT stands at Rs 26.76 Crores as against Rs 25.21 Crores last year and achieved a growth of 6.15%. PBDIT margins have marginally improved to 9.22% compared to last years 8.85%. During last two quarters raw material prices are stabilizing and shown decreasing trend. Sales prices are also now factored with present input costs and accordingly 4th quarter PBDIT margins have improved to 13.39%.

Considering the present situation of stable raw material prices with marginal downtrend and customer prices factored with all input cost increase, PBDIT margins are estimated to revert back to 12% plus levels.

Present operating model is to supply the castings in fully machined condition with 100% out-sourcing of machining activity. Some of the customers buy in un-machined condition as well. Machining outsourcing spend is around 15% for wind castings and weighted average spend will be around 11%. There is an opportunity to strengthen the margins by establishing In-House machining facility.

Power cost contributes around 8.2% of our costs. Present purchase cost of electricity from MSEB is around Rs 10/Unit. With establishment of captive renewable power plants will facilitate in optimizing the costs. Renewables offer more than Rs 5/Unit savings after setting off operating expenses.

During next 2 to 3 years , apart from increasing the foundry capacity from 30,000 MT to 45,000 MT, focus will also be to establish the machining facilities and captive renewable power plants to strengthen the margins.


a) Opportunities

Seizing supply chain opportunities

Recent increases in commodity prices, coupled with the emerging impacts of shrinking supply chains all over the world, are pointing to a huge opportunity for India in the global wind energy supply chain. The unprecedented twin challenges of ensuring secure and affordable energy supplies and meeting climate targets have propelled wind energy into ever faster growth and opportunities.

Offshore Wind:

In 2022, GWEC India convened a supply chain stakeholder roundtable, which outlined high-impact opportunities for catalysing wind power generation and manufacturing in the state of Tamil Nadu. GWEC also presented a similar scenario to the government of Gujarat, alongside recommendations on repowering, offshore wind, robust monitoring of utility-scale wind farms and transmission projects to various central government agencies. Floating offshore wind is likely to rapidly bring down costs, creating the opportunity to open up more markets. The industry can also use existing maritime and petrochemical expertise to transition into floating offshore wind. Floating wind will need to move to a larger scale, and the first commercial project will be key to setting a model that enables future floating offshore wind project deployment.

b) Threats

Global wind installations are mainly driven by China & USA. Global economic uncertainty is still around the corner with Russia-Ukraine conflict yet to be resolved and any head winds in these regions may impact the overall demand.

Even though commodity prices have stabilised and showing downward trend, but the absolute number much higher than historical values and global inflation and interest rates are still at higher levels and may impact faster recovery.


In accordance with the SEBI Listing Regulations, the Board of Directors of the Company is responsible for framing, implementing and monitoring the risk management plans of the Company. The Company does from time to time identify risks associated, assess its impact and take appropriate corrective steps to minimize the risks that may threaten the existence of the Company. Annual risk assessment exercise is conducted in the line with the framework, existing risks, their mitigation plans are evaluated and new risks, if any, are identified. The Audit Committee has additional oversight over financial risks and controls. It reviewed the mitigating factor and actions initiated by the management to minimize the impact.

Risk Mitigation

To mitigate various risks significant to its business, your Company took several strategic initiatives during the year, such as:

• To mitigate risk of limited customer base the Company has developed castings for new customers like Senvion India Pvt. Ltd., GE India etc.

• To mitigate exchange fluctuation risk Company has availed Term Loan in Foreign Currency (FCTL) and also entered into currency swap arrangement which will ensure natural hedge against export.

• Focused efforts are taken to develop alternative sources for its critical raw material supplies i.e. Pig Iron and CRCA Scrap etc.

These initiatives have helped minimize the impact of uncertainties and helped the Company to achieve its planned business objectives during the year.


The Company works only in one segment i.e. manufacturing of SG & CI Castings.


Sr. No. Key Financial Ratios 2023 2022 Remark
1 Debtors Turnover 10.64 9.27 No material change
2 Inventory Turnover 4.68 4.99 No material change
3 Current Ratio 1.01 0.96 No material change
4 Debt Equity Ratio 2.38 2.41 No material change
5 Interest Coverage Ratio 1.06 1.30 No material change
6 Operating Profit Margin (%) 6.29 6.25 No material change
7 Net Profit Margin (%) 0.30 0.50 Due to unprecedented increase in input prices and lag in corresponding increase in sales price profitability ratios have come down.
8 Return on Net Worth (%) 2.50 4.25 No material change (as per Note 40)


The Company believes and recognizes that its employees are important resource in its growth and to give competitive advantage in the present business scenario. Ensuring business operations, employee safety and welfare became the foremost concerns for the Company.

During the year under review, the company ensured to keep the safety and the wellbeing of its employees as its topmost priorities. The Company has total 183 employees as on March 31, 2023. The company continued with its focus on an efficiently recruiting employees with the right talent and groom them to build a strong leadership pipeline. The diversity and inclusiveness in the workforce remained a strong fundamental to the company, in line with it the company continued to bring in more women employees.

The Company has well-thought out and employee-friendly HR policies which it has led to a positive working relationship with its employees. The Company has not had any work stoppages or cessations owing to labour disputes. The Company continues to lay great emphasis on Safety and Security. To ensure adherence to safety protocols, the company follows stringent procedures to safeguard and protect its workforce. The company also keeps prescribing policies and procedures while imparting training to its workforce. It has a system in place that promotes a positive work environment free of all forms of harassment.


The Company has in place a well-framed internal control system that authorizes, records, and reports transactions to safeguard assets and protect against loss from unauthorized use or disposition. The internal controls ensure the reliability of data and financial information to maintain accountability of assets. These internal controls are supplemented by extensive internal audits, management review, and documented policies, guidelines, and procedures.


For the first time Indian Accounting Standard was applicable from the F.Y.2021-22 due to migration from BSE-SME Exchange to the Mian Board of BSE & NSE. The Company has adopted and has followed all the treatments in the Financial Statements as per the prescribed Indian Accounting Standards.


For sake of brevity the items covered in Boards Report are not repeated in the Management Discussion and Analysis Report.

Cautionary Statement:

Certain Statements in the Management Discussion and Analysis describing the companys objectives, projections, estimates and expectation or predictions may be forward looking statements within the meaning of applicable laws and regulations. It cannot be guaranteed that these assumptions and expectations are accurate or will be realized. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/ supply and price conditions in the domestic markets, changes in the Government Regulations, tax laws and other statues and incidental factors.