Nava Bharat Ventures eyes marginal sales growth in FY12

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Nava Bharat Ventures eyes marginal sales growth in FY12

GRK Prasad, director of finance and corporate affairs at Nav Bharat Ventures expects the 64 megawatt (MW) power plant to be operational in the third quarter (Q3) and the company would get about five months revenue generation from that.

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GRK Prasad, director of finance and corporate affairs at Nava Bharat Ventures expects the 64 megawatt (MW) power plant to be operational in the third quarter (Q3) and the company would get about five months revenue generation from that.

He also stated that the ferrochrome tolling agreement with Tata Steel would commence in Q3. "We expect to maintain a marginal growth in terms of sales because the Ferro-alloy scenario is better then last year," he added. The high grade coal sales are expected to commence from November.

Here is the edited transcript of his interview. Also watch the accompanying video.

Q: When will the 64-MW power plant get commissioned? When will the revenues from that come into your balance sheet?

A: We expect the 64 MW to be operational in Q3. We would have about five months of generation coming from that.

Q: For the whole year, how much will the 64 MW power plant contribute? What kind of agreements you got into with respect to long-term or given where the spot merchant rates are? What are you targeting by way of revenue inflow for 12 months?

A: As far as contracts are concerned, we will be going through the spot contracts. We would like to conclude the contracts when the unit is commissioned. It is safe to assume that we should be getting around Rs 4 per unit going forward.

Q: You have signed the ferrochrome tolling agreement with Tata Steel. Can you take us through that? What does that means for the company?

A: The tolling arrangement for ferrochrome is likely to start in the Q3. We have entered into an agreement with Tata Steel to convert ferrochrome of an annual capacity of 50,000 tonne.

This year, it will be a part of that output around 25,000 tonne or so. It would first ensure that the unit is completely optimised with all the fixed cost being recovered. We would also have a steady return in terms of transfer price of power, which is used in this conversion process.

Q: In FY11, your sales came down by close to about 6%. What kind of growth are you expecting in your revenues?

A: The average rate of merchant power realisation has fallen compared to last year. We expect to maintain a marginal growth in terms of sales because the Ferro-alloy scenario is better then last year.

Q: Do you expect to start coal mining in Africa as well?

A: Yes, with the Zambia unit. We have a coal handling and power producing plant which will get commissioned in the next month. Coinciding with that, the high grade coal extrusion will also take place. The high grade coal sales will commence sometime from November.

Q: What does the debt situation in the company stand at because you have these capital expansion plans as well?

A: The company is very low as far as leverage is concerned. Currently, the consolidated debt is about Rs 360 crore.