Key highlights

• GMDC reported 15% growth in net sales to Rs 1630.70 crore for FY'12. The net sales from mining segment, which primarily constitute lignite and bauxites, stood at around Rs 1450 crore and sale from power stood around Rs 200 crore. Within mining segment, sale from Lignite stood at around Rs 1357 crore and that of Bauxite, around Rs 77 crore.

• For FY'12, the company was able to mine about 113.42 lakh tons of lignite mine, up by 11% y.o.y and about 8.7 lakh tons of bauxite mine, up by 25% y.o.y.

• GMDC is the only company allowed by the government to sale lignite on merchant basis, while for rest of companies namely GIPCL and GPCIL, have to use their mines only for power generation.

• Of the total lignite sale, about 25% goes to large power plants and of the balance 75%, about 25% goes to different captive industries, 10% to cement, 15% to textile, 10% to ceramics, bricks, and rest to paper and other small scale industries.

• GMDC had taken some price hikes during FY'12. However, large power plants continue to pay at old rates. GMDC already had asked the order from State Government and same will be approved as per the management. So far, for sale of lignite to large power plants, revenue is booked only at previous rates.

• Most of the mine capacity of GMDC is already approved by the environmental authority and there should not be a problem for GMDC for further increasing the mining activities in near future. Bhavnagar mines, the company already has approval of 30 lakh tons and it mined about 21 lakh tons in FY'12. Further, for Bhavnagar, company also has received enhanced approval limit of upto 50 lakh tons. Similarly for Tadkeshwar, the approval is for 25 lakh tons against which mining in FY'12 were about 20 lakh tons.

• During FY'12, about 871 m units of power were produced by the power plants, down by 25% y.o.y. The plant operated at PLF of 40% vis a vis 54% last year. Maintenance problems led the loss of about 95 days of operations. Management has planned to hire out professional service for the O&M of the plant and is confident of better PLF and number of days for FY'12. The plant was operational at PLF of 50% in May and June'12.

• For FY'13, management expects to incur capex of about Rs 300 crore on wind power where it plans to add about 50 MW of power. About Rs 10 crore capex is planned for equity investments in some small JV's and bout Rs 30-40 crore is for land investments for future projects.

• The company had a JV with Nalco, where GMDC's stake will be 26%. This requires an investment from GMDC's end to the tune of about Rs 340 crore. Half of the investment made will be in form of cash and balance in form of Bauxite supply. GMDC will gain in all the value addition made by Nalco. GMDC expects profit of about Rs 200-250 crore p.a from this project which will be operational in next 3 years.

• Management expects to mine about 125-130 lakh tons of Lignite in FY'13. The incremental mining will take place in Bhavnagar, Tadkeshwar and Matano-madh mines. For Bauxite, management expects to double the mine in FY'13 to around 14-15 lakh tons.

• Overall, management continues to remain confident and expects to perform better in FY'13.