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ShareHyderabad: Sanghvi Movers Ltd, the largest player in the crane hiring market, is planning to focus on refinery segment as the construction of refineries reaching critical stages throws up opportunities.
The company is working on a plan to deploy its cranes at Bhatinda, Dahej and Bina.
"In the next two years there is going to be a major deployment of cranes in this segment," Sham Kajale, ED and CFO of the company, told analysts on a conference call.
"We have already deployed some equipment at Bhatinda. While 12 of them are on the site, four cranes are on their way," he said. Also, the company is upbeat about the prospects in power and cement.
The company, which sees an uptick in the market this quarter, is planning to raise its rentals. "There is an opportunity for upward revision of the rentals. We expect that it would be in the range of 5-10%. The revision would happen only in the last quarter of this year," Kajale said.
While the utilisation rate in the last quarter was about 75-78%, it is expected to rise to 80% in the next two quarters.
For the second half of the current fiscal, the company is planning a capex of Rs 90 crore for acquiring about 11 cranes with a mix of old and pre-used.
Sanghvi's plans to make foray into a larger capacity cranes market received a setback in the previous quarter. The company was to buy about 7-8 cranes, including two cranes of 1,400 tonnes and 600 tonnes. However, it had to cancel the order for cranes due to bad market conditions.
Sanghvi was under pressure recently with Reliance moving about 6-10 cranes into the market. However, Kajale said, the presence of Reliance in the crane rentals market was temporary.
"Reliance was there only for few months. Now, we don't see them, may be due to the fact that their equipment has already been deployed. May be Reliance was testing the waters. Anyway, we understand that the cranes the company had were more for maintaining its own refinery. After the annual maintenance of the refinery, Reliance must be using the cranes in the rental market," he said.
While the company didn't have any plans to raise funds for capital expenditure, Kajale said the total debt stood at Rs 465 crore including Rs 11 crore as working capital.
About Rs 72 crore were repaid in the first half of the current year while the average debt servicing costs are at 10.31%.
Of its 52,000 tonne capacity, Sanghvi is said to have committed about 35-40% for the long term.
In the second-quarter, the company recorded revenues of Rs 80.43 crore and a net profit of Rs 21.48 crore. While power sector contributed about 41% to the sales, windmills brought in 19%. Other key sectors for the company include cement (16%), refinery (12), steel and metals (6%) and others (4%).
