Domestic steel maker Prakash Industries today posted a 30 per cent rise in its net profit at Rs 266 crore in the 2009-10 fiscal on the back of higher production, demand and cost reduction in its operations.
"Prakash Industries reported highest ever net profit of Rs 266 crore for the FY'10 as against Rs 204 crore in FY'09 mainly driven by marked improvement in capacity utilisation, higher integration and resultantly reduced cost," the company said in a statement here.
For the financial year 2009-10, the company said its net sales stood at Rs 1,568 crore as against Rs 1,526 crore in FY'09.
"The company has achieved growth of more than 22 per cent in its sales volumes compared to the previous year which helped the firm to improve its operating margins," it added.
Commenting on the earnings, its CMD V P Agarwal said, "The strong financial performance is the result of improved production levels and efficiencies and greater level of integration that we have achieved. We expect the trends to continue going forward."
Prakash Industries has chalked out a Rs 3,300-crore expansion and diversification programme for the next five years.
At present, the company has an annual steel production capacity of 6 lakh tonnes which would be ramped up to 1 million tonne per annum (MTPA) in two phases by 2011 at an estimated investment of Rs 100 crore.
Also, the firm, betting big on energy sector, has planned an expenditure of Rs 2,500 crore to take the overall captive power production capacity to 775 MW by 2015. It has a power production capacity of 100 MW, of which 75 MW is coal-based and the rest is generated through waste heat recovery route.
"As part of the programme, we plan to add 625 MW in captive power generation capacity in the next 3 years," it added. The company already has a coal mine allotted to feed the expanded power business.
In its core steel business, the company said it expects the expansion to be complete in the next two years.
"We expect the iron ore mines, both in Chhattisgarh and Orissa, to be operational in the current year," it said without specifying the estimated reserves in these blocks.