Suryachakra Power expects topline of Rs 300cr in FY11

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Suryachakra Power expects topline of Rs 300cr in FY11

In an interview with CNBC-TV18, VSS Srinivas, CFO of Suryachakra Power spoke about the latest happenings in his company and the road ahead.

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In an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, VSS Srinivas, CFO of Suryachakra Power spoke about the latest happenings in his company and the road ahead.

Below is a verbatim transcript of the interview. Also watch the video.

Q: Could you tell us a bit more about the amalgamation and how you have reached the swap ratio 15:28?

A: Suryachakra Power Corporation Ltd is our flagship company of the group. It was listed on Bombay Stock Exchange and it is operating at 20 megawatt (MW) diesel-based power plant at Port Blair in the Andaman and Nicobar Island for the last eight years.

Suryachakra Energy and Infrastructure Private Ltd was promoted by core promoters of Suryachakra Group. This company has been developing lignite-based power projects, three power projects in Bhavnagar district of Gujarat with a capacity of two 60 megawatt and one 30 megawatt. All the critical approvals are in place and the company has entered into lignite supply agreement with Gujarat Mineral Development Corporation.

SEIPL, that is, Suryachakra Energy and Infrastructure Private Ltd presently has 100% subsidiary by name Namratha Bijli Private Ltd. Namratha is developing 150 mw based coal based power project in Vishakhapatnam district of Andhra Pradesh, that project is also at advance stage of completion. IFCI has already agreed to invest up to 39% of the equity required for the project Namratha and they have already committed Rs 81.60 crore for this project.

Presently, SPCL owns-apart from 20 MW diesel plant-another five plant of biomass-two in Chhattisgarh and three in Maharashtra-all are 10 MW projects only. Out of this five, four projects are already operational and another project is expected to commence commercial operations by the end of January 2011.

The management of SPCL proposes to diversify into multi-integrated power company and with that intention they have decided to acquire the Suryachakra Energy and Infrastructure Private Ltd. Presently, only diesel and biomass is there and shortly coal and lignite also will integrate to feed stocks projects also.

Q: You indicated a lot of expansion plans for all your subsidiaries. What will this do in terms of your revenues for the entire year FY11?

A: In FY11, we may end up close to Rs 300 crore with a bottomline of close to Rs 10 crore.

Q: What were the resulting operating margins look like?

A: As far as our flagship company is concerned there are certain unresolved issues with A&N Administration. Actually we have incurred close to Rs 84 crore on our project but provisionally assessed at is Rs 63.14 crore. All these years we have been receiving our bills from A&N Administration on that basis only-because of that only the operating margins are very low.

Two days back we have received the approval from A&N Administration. The project cost was approved at Rs 75.60 crore without considering IDC and preliminary and pre-operating expenses. As things stand today, we are going to get close to Rs 22.5 crore as additional revenue once this cost is finally approved by joint electricity regulatory commission.

Our bottomline will increase by similar amount because already fixed cost and variable costs we have already required at this level itself so we expect this to happen in the next three-four months.