Once implemented, company sources expect the project would give NEPC Micon almost 500 MW of wind power generation capacity and another 100 MW of solar power.
The company has earmarked around Rs 2,000 crore for investments in wind power generation to emerge as a giant in the segment rather than be a mere wind turbine producer. These plans appear sound on paper.
Besides, what is even more interesting is the fact that the company plans to utilise a mix of internal accruals and term loans for funding the projects.
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However, the company's financials for the six months ended September 1996 fail to inspire much confidence.
Turnover at Rs 215.15 crore (Rs 339.38) actually dropped 36.61 per cent. Other income also dipped 49 per cent to Rs 28 lakh. Despite this, stringent expenditure control has helped the company improve its margins. In fact, margins at the operational level sans the other income component improved from 17.83 per cent to 24.17 per cent.
A burgeoning interest burden of Rs 7.55 crore coupled with a higher depreciation charge further ate into the profitability of the company.
Thus, net profit at Rs 35 crore actually slipped 29.72 per cent compared with a profit of Rs 49.23 crore last year.
The drop in earnings growth would have been accentuated if the company made provisions for taxation in the six months of the current fiscal.
With the grim scenario of a power deficit facing the country, the Union government had offered attractive fiscal incentives for investment in non-conventional, renewable sources of energy.
Taking advantage of this opportunity, NEPC Micon has today become the undisputed pioneer of the wind turbine business in the country.
In fact, the company at present controls almost 70 per cent of the Indian market for wind energy and has set up wind farms for companies like Indian Petrochemicals Corporation, Chettinand Cements and Dalmia Cements.
The company has now entered the western region in a big way.
It has tied up with Sicom to spread the concept of wind energy in Maharashtra. Thus, with no real competition in the booming wind turbine generator business, NEPC Micon expects to continue its growth path.
However, considering the company's dismal half yearly performance and the competition which has marginalised earnings from the airlines business, NEPC Micon's target to achieve a turnover of Rs 912 crore for the current financial year 1996-97, seems to be quite out of reach.