Shriram EPC wind turbine unit sees revenues doubling this fiscal

Chennai-based construction company Shriram EPC’s wind turbine making unit is hoping to double its topline to Rs1,000-1,100 crore by March, said P Ashok, managing director, Leitner Shriram Manufacturing (LSML).

LSML is a 51:49 joint venture between Italian firm Leitner Technologies and Shriram EPC formed in 2007. LSML currently manufactures 250 kw and 1.5 mw wind turbine generators (WTGs) at its Gummidipundi plant, which was commissioned in January 2009.

“We have already tested the 1.8 mw turbine and will start production in two months,” Ashok said.

LSML reported a topline of Rs550 crore last fiscal and about Rs360 crore in 2009-10.

“We are just breaking even. We did about Rs2-3 crore (of net profit) last year. We take two steps and the rising interest rates pull us down one step,” he said, not divulging the company’s targeted profit after tax this financial year.

The Reserve Bank of India has since March 2010 hiked the rate at which it lends to banks by 2.25 percentage points to 7.25% in a bid to stem inflation.

The central bank is said to raise rates again at its policy review on June 16.

LSML is presently in the midst of its plan to double its production capacity from 120-150 WTGs of 1.5 mw at a cost of Rs150 crore.

“Our blade facility is ready for commissioning but we’ll wait till we test our 3 mw turbine before we ramp up our main plant production,” Ashok said.

LSML has an order backlog of about 180 mw, one-third of which is for Orient Green Power, a Shriram EPC group wind power developer.

About 20% of LSML’s business comes from exports, primarily Europe. Ashok said the continent has not yet fully rebounded after the downturn and that the company is stepping up efforts in Asian
markets such as Thailand and Sri Lanka.

LSML’s competitors include market leader Suzlon Energy, Vestas India, Gamesa Wind Turbines and Enercon India.

Spain’s Gamesa, which has been in India for two years, recently announced major expansion plans in the country, eyeing a capacity of 1,000 mw by September and growing revenues fivefold to Rs5,000 crore by 2014.

The company bagged a $2 billion order, the biggest ever in the Indian wind power sector, to supply turbines for 2000 mw to Caparo Energy India.