Key takeaways of the meet

REL have commissioned their Greenfield manufacturing plant for manufacturing of equipment for preparation, transportation and placing of concrete at Gummidipoondi in the state of Tamil Nadu. The plant set up at a cost of Rs 30 crore is equipped to manufacture 1500 transit mixers, 300 pumps and 150 batching plants with the technology of leading German players such as Wiggert & Co, Intermix and Waitzinger for Batching plant, transit mixers and concrete pumps respectively.

Currently the product range includes concrete batching plant for capacities 30 to 120 cbm/ hr, transit mixers 4, 6 & 9 cbm and stationery trailer mounted concrete pumps of capacities 45 & 60 cbm/ hr. While the company manufactures the truck mounted boom placers of boom length 17 meters in Gummidipoondi plant it will import and sell boom placers of length 35 meters and stationary concrete distributors of boom length of 29 meters.

While the company is one of the two leading players in drilling equipment, it is a new entrant in construction equipment space and specifically concrete preparation, transportation and placing equipments. However the company hopes to garner a market share of 20% for concrete preparing, transporting and placing equipments in the country in next 4-5 years time.

Currently almost entire standalone revenue of the company comes from drilling equipments and the company expects the revenue of construction equipment business to overtake that of drilling equipment business in next 4-5 years.

Last several months the company has built a national sales and support/ service network across the country for the construction equipment business in all the regions of the country.

Going forward, the demand for drilling equipment (for coal and other mining sector) to witness steady middle single digit but the demand for water well rig which is erratic in nature is always unpredictable. As the water well rigs market sees refurbishing in large numbers the demand for fresh orders has become seasonal. However the demand for construction equipment has started picking up with the necessity of the infrastructure and adequate investment in that.

The company's consolidated revenue for FY10 was Rs 158 crore with standalone sales being Rs 114 crore. The company announce its consolidated figures as the company is in the process of merging two Potential services where it has 48.3% stake with that of SEMACH, a subsidiary where it holds 70% stake. These two companies are engaged in engineering design solutions.

Currently the order book of drilling equipments was Rs 23 crore and this will be executed within H1FY11 of the company.

The company's drilling division proposes to expand its product offerings including ancillary products/ services catering to both mining and non mining sectors which could create a sizeable revenue stream for the company going forward. The company is yet to firm up its plans in this regard.

The company is developing a commercial realty property with a developable area of 150000 sft at Chembur Mumbai. The company has 60
% interest in this property developed along with another developer on JD basis.

There are no plans to renew investment in wind power space.