SATC Satcon Technology Corp. (MM)

American Superconductor Corporation (AMSC) has received a follow-on order from Inox Wind Limited (“IWL”) for 50 Wind Turbine electrical control systems (“ECS”). The control systems will be used by IWL for its 2 megawatt (MW) wind turbines.

Electrical control systems are a set of integrated and high-performance power electronics systems that include the wind turbine power converter cabinet, internal power supply and various other controls. Jointly, these systems facilitate to control power flows, regulation of voltage, monitor system performance, and control the pitch of wind turbine blades and maximize efficiency.

These systems are being used in Inox's 2-MW doubly-fed induction turbines. The company has been receiving orders from IWL, part of India's Inox Group of Companies, for the past two years. In January 2011, the company had received a $9 million follow-on order for the supply of wind turbine ECS from IWL. In August 2010, Inox had placed an initial order for 17 of American Superconductor’s wind turbine ECS to be utilized in 2-MW doubly-fed induction wind turbines. These turbines are being manufactured by Inox under a global American Superconductor Windtec license that it received in May 2009.

American Superconductor Corp. is a power technology company that offers an array of proprietary technologies and solutions catering to electric power infrastructure. It focuses on the rapidly growing power and utility industry, specifically wind power and smart grid infrastructure technology.

However, the company’s growth in the wind energy market depends largely on the availability and size of government subsidies and economic incentives. Moreover, the majority of its revenue depends on a few large customers. Any untoward move from this concentrated customer base would affect the profitability of the company.

The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock. The company mainly competes with Satcon Technology Corporation (SATC).

 
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