Goldstone Teleservices to invest Rs 55cr on energy sector plans

Investment to be funded via debt, internal accruals apart from technology funding

City-based Goldstone Teleservices Limited has announced that it would invest close to Rs 55 crore over the next two years in the manufacture of composite polymer insulators, surge arresters and prepaid household energy meters.

The company is also mulling hiving off its BPO division and merging it with its software company.

The proposed Rs 55-crore investment is part of the company's move to focus on the energy sector. The investment will be funded partly through debt and through internal accruals apart from technology funding through the Department of Science and Industrial Research.

For the full year, Goldstone Teleservices posted a nominal Rs 10 lakh net profit for 2003-04 as compared to Rs 1.22 crore net profit in the previous fiscal.

The abysmal performance put up by the flagship company of Goldstone Group has been attributed to its dwindling margins in telecom operations and growing expenditure. It supplies jointing kits and sleeves to telecom operators.

According to the unaudited accounts approved by the board of directors of the company, Goldstone Teleservices has recorded a turnover of Rs 12.33 crore for the year ended March 31, 2004 which is Rs 68 lakh lower than the revenues earned in the previous financial year.

Other income rose more than 100 per cent to Rs 1.59 crore from Rs 0.70 crore in the previous year, and has saved the company from running into losses.

The company has ended up with a Rs 14 lakh profit before tax after taking into account a total expenditure of Rs 13.78 crore. Interest burden on the company has grown to Rs 1.14 crore from Rs 0.52 lakh in the previous year.

MVSR Kamesam, director of Goldstone Teleservices Limited, said here on Saturday that, keeping in view of the business scenario in the telecom operations the company has now decided to focus on the energy sector.

According to Kamesam, the company would invest about Rs 50-55 crore on the manufacture of composite polymer insulators, surge arresters and prepaid household energy meters in the next couple of years.

He said that the company would enter in to a joint venture with either a South African company or an Israeli company soon to establish a manufacturing unit for prepaid energy meters in the state.

He said that the company's BPO operations, especially in the power engineering outsourcing is expected to grow further as the government has set high targets for power generation.

Kamesam said that the insulator division would earn revenues of up to Rs 36 crore this year.

"The company will also make its foray into the oil and gas sector as a provider of levers even as the development of heat shrinkable sheets for oil and gas pipelines is under progress in the laboratory," he said.

The company has already supplied about nine thousand insulators for railway traction. It has also participated in tenders for the supply of insulators invited by the power utilities in Andhra Pradesh and Maharashtra so far.