KEC International, the Mumbai-based engineering, procurement and construction (EPC) player in the power transmission space, plans to enter new countries in Africa, central Asia and the Middle East next fiscal.
R D Chandak, managing director, KEC International, said, “Despite a slowdown across the world, the transmission sector in the country is going through a boom time.” This was driven by orders from public utilities, spearheaded by the Power Grid Corp of India Ltd (PGCIL), he said.
Chandak said most utilities book a number of orders in the last quarter to meet their targets for the year. As a result there is a huge increase in orders in the last three months of the fiscal. “Though every year the utilities failed to meet their budgetary allocations, this year it is heartening to see that they are keen on meeting their targets,” he said.
This is giving the domestic transmission sector a boost in times of stress. The company, on Thursday, won two orders worth Rs 291 crore from PGCIL.
Most of the companies have order bookings for the next one year, while KEC has orders for the next one-and-a-half, Chandak said. Apart from the booming domestic market, which accounts for 40% of the company’s total revenues, KEC is keen on expanding its operations in the overseas market. “We are looking at entering newer countries in Africa, the Middle East and central Asia as the export market gives us the maximum revenues,” he said. The company, which operates mainly in four business areas - transmission, distribution, telecom and railways - is also looking at diversifying into other areas under its railway division. “We were so far present in railway electrification but will soon start bidding for signaling and track-laying,” he said.
Signaling and track-laying, which were earlier done by the railways, are now being opened to the private sector and KEC is one of several companies planning to make a foray there, Chandak said.
The company has a tower manufacturing capacity of 200,000 tonnes per annum through several partners across the country. KEC plans to pump in more money into its partners to augment capacity by another 20,000 tonnes per annum by 2009-10.
For the next fiscal, the company has a capex target of Rs 50 crore as against Rs 80 crore this fiscal. It has an order book of Rs 5,000 crore, which it plans to execute over the next 18 months.
The company is growing at the rate of 25%, which is in
tandem with the growth rate of the industry. Margins in the transmission EPC business are about 10% currently, Chandak said.
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