Kalpataru Power expects surge in demand

Kalpataru Power Transmission (KPTL), a leader in the field of turnkey projects for power transmission lines, plans to reap rich rewards from Power Grid Corporation's (PGCIL's) proposed national grid.

The corporation proposes to invest up to Rs 70,000 crore in the grid till 2012, which will create an inter-regional transmission capacity of about 30,000 mega watts.

"Besides the inter-regional capacity to be created by PGCIL, we hope to see a surge in spending by state electricity boards (SEBs) on the new transmission and distribution network, upgradation and modernisation. This should boost demand in the next two years," Kamal Jain, senior vice president, finance, KPTL, said.

Last year, the company was awarded the contract for the evacuation network system for PGCIL's Rihand project. "Our construction team and site infrastructure has enabled us to race ahead of schedule and we hope to complete the job well ahead of time at PGCIL's special request," said Jain.

Apart from catering to the domestic demand, the Gandhinagar-based company is targeting the international markets in a big way. It is currently executing a $12 million turnkey job in Zambia and supplies transmission line towers to Australia, Indonesia, UAE, Vietnam.

The average physical exports of the company have been over 35 per cent of its total business in the last five years.

In the last few years, KPTL has also bid for turnkey jobs in various markets in Africa such as Morocco, Tunisia, Algeria, Nigeria, Ghana, Sudan, Ethiopia, and Zambia amongst others.

"The company will continue to focus on its core competency "" EPC contracting in power transmission. We are also looking at other areas of infrastructure and contracting," said Jain.

The company has the lowest debt equity ratio in the industry at 1.25:1, including the working capital, and only long term debt equity ratio of 0.27:1, excluding the working capital. Its expected turnover for the financial year 2004-2005 is in excess of Rs 500 crore as compared with Rs 150 crore in 2001-2002.

The organised power transmission industry in India is worth Rs 2000 crore. This is expected to grow rapidly following PGCIL's investments. KPTL's market share is around 20 per cent.

The company's Gandhinagar plant has an installed capacity of 54,000 MT. It is amongst the single largest plants in the world.

Recently, KPTL has set up 7.8 MW power plant to generate power by using mustard husk, cotton stalk as fuel at a cost of Rs 30 crore.

The company has also entered into a power purchase agreement with Rajasthan Rajyya Vidyut Prasaran Nigam and three Vidyut Vitran Nigams of Jaipur, Ajmer and Jodhpur.