Electricity Act 2003 powered business interests : Easun

The Electricity Act, 2003 made a significant difference to firms with business interests in the power sector, feels Easun Reyrolle's senior management team.

Easun Reyrolle, which manufactures equipment for the power transmission and distribution segment, has registered a marked growth in sales in the first quarter of the current financial year.

Sales stood at Rs 21.62 crore, up by 220 per cent over the corresponding period of the previous year (boosted to an extent by a recent acquisition).

The Electricity Act clarified lots of issues, and the result is growth in investment in the power sector, says J D N Sharma, chief executive of the company. In addition to change in regulations, the upbeat forecast of economic growth has changed things for the better, feel the management team.

Company's chairman, Hari Eswaran, said that if one believed in the India growth story, it translates into growth for the power sector.

In the power sector, Easun Reyrolle's business centres around making equipment to meet the needs of power protection, automation, metering and manufacturing switch gears.

Last fiscal, Easun acquired a switch gear maker, ESW, for Rs 5 crore and merged the company with itself. Sharma forecast that the business coming from automation, metering and switch gears would grow significantly in future.

The company's customer base is evenly split between public sector and private sector entities. The receivables position in the industry has improved over the last couple of years, said Eswaran.

While the bulk of the company's business comes from the transmission and distribution side of power industry, it has a stake in a small amount of generation through windmills.

The management said the company is open to any opportunity in the power sector. The team added that it has the strength to raise resources for more inorganic growth too.

A strategic investor, Power Ventures, is to invest between Rs 2 crore and Rs 3 crore in the company following a preferential allotment. It would translate into about 6 per cent in the total equity.

The Indian promoter, the Easun group, holds 27 per cent of the equity, while the overseas promoter, Reyrolle, holds 25 per cent.