Adhunik Metaliks Ltd will spend Rs 422 crore over 17 months to increase production of key inputs for steel making and grow profits, a senior official said on Thursday. The firm is aiming at net profit of Rs 96 crore in 2007/08, and Rs 176 crore in 2008/09, director Manoj Kumar Agarwal said. It will set up a 17 megawatt power plant and expand capacities of sponge iron and ferro alloy at its plant in Orissa, he said. The firm will also set up railway connectivity to transport key inputs to the plant site. Adhunik has tied up with banks and financial institutions for raising Rs 274 crore as term loan for the project. The rest will be financed through internal accruals and equity. "The project will halve raw material costs, and increase operating margins to 26 per cent, from 18 per cent now, helping profits to grow," he said. In 2006/07, the firm reported a net profit of Rs 77.4 crore on sales of Rs 811 crore. It is aiming at Rs 1100 crore in sales in 2007/08, Agarwal said. The firm, which produced 4,50,000 tonnes of steel annually at its Orissa unit, will source iron ore from mines of its wholly-owned mining subsidiary, Orissa Manganese & Minerals Pvt Ltd, and its pits in Jharkhand state. The company also plans to sell 10 per cent to 11 per cent of its stake in Orissa Manganese & Minerals to private equity investors, he added.
Source:The Economic Times
Source:The Economic Times
6th March, 2008