Crompton Greaves, engineering and consumer product company, part of the Avantha Group, reported an over 50% jump in its consolidated net profit for fiscal 2010 to Rs 860 crore while sales grew just 5%, owing to the decline in the revenues from its overseas operations. Crompton’s managing director Sudhir M Trehan spoke to DNA about the company’s prospects for this fiscal and its capex plans, among others. Excerpts from the interview:
Sometime last year you announced you would be making a $600 million acquisition in Latin America. What’s the status on that?
No, it fell through.
You made two buys last fiscal, UK-based Power Technology Solutions and a part of Nelco, both of which were not high cost. Does this mean you will look largely at similar buys in the future?
We made those acquisitions to fill gaps in our businesses. The agenda is to make both small and big acquisitions.
Can we expect some acquisitions this year?
I would not like to comment on that at the moment.
What is your capex for this fiscal and where will it be spent?
We will be spending about Rs 400 crore and that is mostly for technology and quality upgradation. We have enough capacity and we don’t look to expand it this year because we saw a de-growth of 7% in our overseas operations last year. We are looking at growing at 4-5% this year and at about 15% on a standalone basis. Our existing capacity should do. We will see how this year goes and decide on expansion in 2011-12.
What was the idea behind your selling your subsidiary, Malanpur Captive Power?
Having already invested Rs 227 crore in Avantha Power, we did not want two power generation arms, so we sold Malanpur Captive Power to Avantha Power. We wanted to keep generation in one place.
In your last interview to us, you said if anything, your stake in Avantha Power would go down. Does that still hold?
Yes, it will come down when the company goes for an IPO in the next one year or so. The money we invested will have appreciated by the time of the IPO.
Was your Hungarian subsidiary Ganz profitable last fiscal?
Yes, it was.
Could you tell us how much it made?
No, we don’t reveal standalone numbers. All I can tell you is no subsidiary made a loss on a standalone basis.
What is the position of your order-book?
It’s about Rs6,400 crore, of which Rs3,400 crore is in India and the rest abroad. Most of this is in transmission & distribution (T&D) and the pipeline looks really good.
Which of your segments will grow the highest this year?
Each of our three business segments, T&D, industrial and consumer, will grow at 15-18%.
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