Voltas' MEP business records 60% jump in nine months

Voltas, the engineering and air-conditioning major, is banking on the electro mechanical (MEP) and engineering tools division to act as an integrated solutions provider.

The company reported a 60 per cent jump in the MEP business for the first nine months of this financial year with an existing order book of Rs 3,500 crore.

The air-conditioning major has bagged international MEP orders worth Rs 2,700 crore and Rs 800 crore Indian orders.

M M Miyajiwala, executive vice-president (finance) & CFO Voltas, said, "MEP is registering a substantial 40 per cent growth y-o-y. Last year, the company's total turnover before excise was about Rs 2,400 crore, with MEP comprising Rs 1,400 crore."

Voltas has posted a 30 per cent increase in operating income at Rs 2,232.6 crore for the nine months ended December 2007, as against Rs 1,720 crore in the corresponding period last year. The company's net profit for the period under review surged by 131 per cent to Rs 152.96 crore.

The company's decision to introduce its international MEP expertise in the domestic market is expected to pay dividend on back of the retail and infrastructure boom in the country.

Voltas has executed orders at nine out of the ten domestic airports and is currently working on the upcoming international airport at Hyderabad.

The Indian order book is expected to balloon on the back of the retail, infrastructure, hospitality and SEZ growth in the country. The company has re-structured the sales and marketing teams to drive better efficiency in executing the MEP projects.

Miyajiwala said, "The company is emphasising on converting the existing heating ventilation and air-conditioning clients to the MEP projects. We are also looking to enlarge the order size from a single client."

For instance, air-conditioning comprised only Rs 40 crore of the Rs 160 crore order for the upcoming Hyderabad airport.

The company plans to strengthen the bottomline by deriving better synergy from the other divisions such as the engineering tools division.