According to reports, Techno Electric & Engineering may not have added any wind energy capacity in the current financial year, it has big plans to expand in 2013-14, according to a top company official.
The Kolkata-based company so far has wind generation capacity of 207 mega watt, of which 162mw is under its subsidiary Simran Wind Projects Pvt Ltd and and 45 mw with itself.
It has tapped private equity players for raising funds in Simran Wind and these funds will be used for expanding capacity.
“We have signed termsheets with the investor. We had (planned) total of USD 100 million for growing this company until 2020. So we have signed the termsheet with the first investor and we are discussing the definitive agreement. Money will be drawn from the investor when we set up the projects,” Joy Saxena, ED, told moneycontrol.com in an interaction.
In what could bring a fillip to the sector, Finance Minister P Chidambaram in the Budget last month reintroduced generation based incentives (GBIs). The government had withdrawn these incentives last year, and there has been a fall in new wind power installations since.
Saxena says reintroduction of GBI is certainly a welcome move but there are certain ambiguities that need to be addressed.
“They have announced a package of Rs 800 crore. But some things are not clear from that…Is the GBI applicable for next year or the wind assets already commissioned from April 1, 2012. Also will it be at the rate of 50 paise per unit or 80 paise per unit…All those issues have not been clarified,” he said.
Saxena says companies have been reluctant in investing in the wind energy sector due to lack of clarity on these measures. He expects the government to issue more guidelines on GBI soon and investment should pick up post that.
Meanwhile, Techno Electric has started seeing some pickup in the engineering, procurement and construction (EPC) segment in the last couple of months.
“For us this last quarter plus going forward next quarter looks good as far as new order intake is concerned,” he said.
Techno has received around Rs 400 crore worth orders this quarter (Jan-March) and the company is expecting another Rs 200-300 crore worth orders in the next 1-2 months, according to Saxena.
The slowdown in EPC segment has hit companies hard. Techno Electric’s consolidated total income in the third quarter declined 12 percent year-on-year to Rs 149 crore. Net profit was up 9 percent to Rs 25 crore, helped by lower expenses. The company’s EPC sales fell 23 percent last quarter.
For the first nine months of the year, its consolidated revenue was down 9 percent to Rs 547 crore.
In an earlier interview, Saxena had told moneycontrol.com that the company might not be able to achieve 8-10 percent revenue growth in the EPC segment in the current financial year due to the overall slowdown in investments and it hoped to at least maintain last year’s topline.