Suzlon Energy, is planning to diversify out of wind into biodiesel and solar.

Measured by its margins - 38% gross and 22% operating, Suzlon is the most profitable wind company in the world. So why dilute that?

That is what seems to be happening. Does Suzlon really need to take over Repower Systems AG, who last year had a low single digit gross margin and a negative operating margin?

And now, they are going to diversify into biodiesel and solar. I'm all for diversification, but only if it is into higher margin activity. I doubt very much that they can repeat their results in two very different industries. Suzlon just might be falling into the classic trap of diversifying out of their own success.

For now, Suzlon might be best advised to stick to the wind.