Techno Electric: May not see 8-10% growth in FY13 EPC sales
Techno Electric & Engineering feels it won't be able to achieve 8-10 revenue growth in the engineering procurement construction (EPC) segment this financial year, given the overall slowdown in investments. Instead, the company hopes to at least maintain last year's topline, Joy Saxena, executive director, told moneycontrol.com in an interview.
November 23, 2012 / 10:37 IST
Nachiket Kelkar
moneycontrol.com
Techno Electric & Engineering feels it won't be able to achieve 8-10 revenue growth in the engineering procurement and construction (EPC) segment this financial year, given the overall slowdown in investments. Instead, the company hopes to at least maintain last year's topline, Joy Saxena, executive director, told moneycontrol.com in an interview.Due to the overall economic uncertainties among other reasons, corporates have cut back or slowed down project investments, which is inturn affecting EPC companies like Techno Electric. So billing as such has been on a lower side due to slower orders executed."In EPC, particularly the power sector, the industry as such has seen a slowdown. Whatever orders we have, we implemented in the last quarter, but on a slow pace. Customer itself was asking us not to be aggressive. So work done is not to the extent should have been done. So overheads have been booked but billing has not happened," he said.Techno Electric had reported a 17 percent year-on-year consolidated rise in second quarter net profit at Rs 68 crore, as a strong growth in the energy segment offset the sluggish growth in EPC.Last quarter, its revenue from energy segment rose 46 percent to Rs 79 crore, while EPC sales declined 34 percent to Rs 125 crore.Techno's order book stood at around Rs 850 crore end of September. It has further secured a power transmission and distribution related project in Uganda and around Rs 85 crore worth work orders from Power Grid since.Saxena says the company is tapping markets abroad to get more orders, at a time the domestic slowdown persists.Africa is among key markets where it aims to get more orders, while some orders are expected from Bangladesh.TALKS WITH PE FUNDS FOR SIMRAN WINDMeanwhile, Techno's talks with private equity players to raise funds in its subsidiary Simran Wind Project Pvt Ltd, are now at an advanced stage, he said.Saxena, who's also a director at Simran Wind, had told moneycontrol.com in an earlier interaction that the company was discussing couple of proposals and the funds raised would be used to add capacity.The company has since received termsheets from a few firms."We have been shortlisted by 2-3 good funds and they have been actively working with our company. We have also received termsheets from three of them...It is at a very advanced stage. But unless we sign the termsheet, we can't share the information," he said.Techno's current wind power generating capacity stands at 207 mw, of which 162 mw is under Simran and 45 mw with Techno.Saxena said the company could be able to add another 50-100 mw capacity this financial year, if a PE deal is inked in the next couple of months. If the deal gets postponed to next year, then the capacity addition will also have to be delayed.Techno plans to add 600mw of wind power capacity through Simran in the next 5-6 years and the aim is to make it a 1,250mw company by 2020.International Finance Corp had last year invested USD 5 million to acquire 3.38 percent stake in Simran Wind.Meanwhile, Techno Electric also continues to seek opportunities in the power transmission and distribution space. Its subsidiary Jhajjar KT Transco Pvt Ltd has completed a 400kv transmission network in Haryana on a design, build, finance, operate and transfer basis. The Haryana project was on a public-private partnership and Saxena said, on similar lines, it is also bidding for projects in Rajasthan (Udaipur and Jaipur) and is awaiting outcome of that.Techno Electric shares were up 0.3 percent at Rs 197 on NSE in morning trade on Tuesday.nachiket.kelkar@network18online.com Also Read: Check out: 2 good entry-point sectors & why USL may correct Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
