Kirloskar Pneumatics to sell RoadRailer intermodal products in India.
>From the CM Online Vol 22 14 Sep 10 - Sep 23, 2007
Kirloskar Pneumatic : A fresh lease of life Targets Rs 1000-crore turnover by 2010
Kirloskar Pneumatic came out from the purview of the Board of Industrial and Financial Reconstruction (BIFR) in 2001 and after implementing the voluntary retirement scheme (VRS) and asset reallocation. The business was made more focused. By 2007, it is ready to grow at par with the engineering industry. Margin will improve if Kirloskar Pneumatic can debottleneck existing capacities, run them more efficiently and gain the advantage of economies of scale. The management has identified process gas business including CNG compression, marine refrigeration, industrial electrical screw and transmission business, and 250-KW wind-mill gear boxes as the new growth opportunities. These businesses will help Kirloskar Pneumatic to achieve the target set for the year ending March 2010 (FY 2010). The existing business air and gas of compressors will grow at a compounded annual growth rate (CAGR) of 15%. However, the new business lines will grow stupendously through Kirloskar Pneumatic is not in a position to state how much growth will happen in each of its new business line. The picture will be clearer after FY 2008. Kirloskar Pneumatic has planned a capex of Rs 20 crore for its process gas market and Rs 20 crore for its marine gearboxes market in FY 2008. Subsequently, there will be no major capex, apart from routine capex of Rs 20 crore-Rs 25 crore per annum, as the company will debottleneck the capacities. The capex will be met through a mix of debt and internal accruals. Kirloskar Pneumatic is looking for strong growth in the CNG compressor business in view of the investments being made in the oil and gas sector. The company already has 13 orders for CNG compressors. These will be manufactured at its Pune facility. More are expected. The company has hired team of technicians for its marine transmission business, instead of buying the technology, and is paying them professional fees as per the contract. Q1 ending June every year will always be on the low side considering the seasonality of the business. Hence, the management has indicated that the results should be analysed year on year rather than quarter on quarter.
