Diamond Power eyes turnkey to double order book by March

Vadodara-based Diamond Power Infrastructure (DPIL) is looking at increasing its turnkey order backlog from a little over Rs800 crore now to Rs1,500-1,600 crore by the end of the fiscal, said managing director Amit Bhatnagar.

The company is currently the lowest bidder in projects worth about Rs800 crore.

DPIL, formerly Diamond Cables, has four business segments—turnkey or EPC (engineering, procurement, construction), conductors,  cables, transformers and recently, transmission lines.

The company’s EPC expertise included installation of overhead transmission lines, distribution lines, underground cabling and substation projects.

DPIL’s clients include, other than Power Grid Corporation of India, Larsen & Toubro, Kalpataru Power Transmission, Jyoti Structures, Crompton Greaves and State Electricity Boards (SEBs), among others.

“Currently we have no projects from Power Grid and we are not expecting anything from them this fiscal either,” Bhatnagar said.

DPIL expects its turnkey business to contribute the most, at Rs500 crore, among all its segments, to its topline of Rs1,400 crore this fiscal. DPIL closed 2009-10 with sales of Rs847 crore.

“The outlook for next fiscal is also good. We are looking at an order-book growth of 30%,” Bhatnagar said, adding that the size of orders ranges from Rs5 crore to Rs500 crore.

Of the nearly Rs8.4 lakh crore power spend in the Eleventh Five-Year Plan (2007—2012), nearly half is on transmission & distribution, according to a December 6 report by Anagram Research.

“Diamond Power Infrastructure is the only EPC player with major captive facilities (80% of the project cost) which gives the company an advantage (higher margins & lesser volatility, lower cost of carry) over other EPC players who outsource 60% to 70% of the project work,” said analyst Sahil Shah in the report.

Talking of the company’s manufacturing business, Bhatnagar said it has just completed Rs300 crore capex at its two facilities in Vadodara, one of which is for transmission lines, and one in Silvassa. “We won’t be adding any capacity next year,” Bhatnagar said.

For the quarter ended September 30, DPIL’s net profit rose 66% from a year ago to Rs28 crore on a  doubling of net sales to about Rs350 crore.