Walchandnagar Industries hopes that the aerospace sector in the country would give the company a major impetus for growth and this sector along with defence and nuclear would provide for most of the engineering major’s revenue earnings in near future.
“Till very recently, strategic sectors contributed only 30 per cent of our revenues with lion’s share of the revenue coming from conventional engineering, procurement and construction (EPC) business. We are in the process of reversing the ratio,” said Walchandnagar Managing Director and CEO GK Pillai.
“Sugar (plant machinery) is becoming a mundane sector and it doesn’t offer much of a challenge. We want to concentrate more on the strategic sectors. This is also in line our founders’ wishes of contributing to the nation building,” Pillai told BusinessLine.
For the quarter ended March 31 this year, the company recorded a net loss of ₹25.23 crore against a net loss of ₹15.53 crore same period the previous fiscal.
Opportunities are expected to come in the way of this over a century-old engineering firm as the Indian Space Research Organisation (ISRO) plans to entrust the job of building its reliable launch vehicle – PSLV – to an industry-led consortium.
Walchandnagar is among major Indian firms that supply parts and components for the satellite launcher and this business is expected to pick up momentum with the Indian space agency contemplating to increase the number of launches from single digit to 24 in future.
According to a senior Walchandnagar executive, the company is planning a new aerospace fabrication facility in its main plant at Walchandnagar, 130 km from Pune.
Bets On Defence Sector
Among the strategic sectors, defence continues to be the mainstay for Walchandnagar. Its revenue from nuclear sector has been on a slide of late with the last contract from nuclear industry coming in 2010.
“With the government planning to commission 10 indigenously designed 700 MW nuclear reactors by 2030, we expect a spurt in revenue from that stream,” said Pillai.
An official release issued in March said these reactors would mean ₹70,000 crore business to the domestic industry. Walchandnagar is also in talks with Russians and expected to have a role in the construction of additional reactors at Kudankulam, for which deal has already been signed between India and Russia.
When asked what is hurting the company financially, Pillai said delays in the execution of two co-generation projects – to produce power from sugarcane bagasse – have hit the firm badly.
While one project worth ₹1,200 crore is to build 12 co-generation plants for the Tamil Nadu Electricity Board was signed in 2010, other contract from an Ethiopian company for setting for a sugar mill cum co-generation plant worth ₹700 crore, has been hanging fire for long. “Thankfully, the first phase of the Ethiopian plant is expected to be completed by October,” he said.
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