CG Power lines up Rs 135 cr capital expenditure in current financial year

CG Power and Industrial Solutions, acquired by Tube Investments last year, has chalked out capital expenditure plans of Rs 135 crore during the current financial year, the company said.

CG Power and Industrial

Solutions, acquired by the Tube Investments of India group company of Murugappa Group last year, has chalked out capital expenditure plans of Rs 135 crore during the current financial year, the company said.

The capex plan would be utilised to improve production at its manufacturing facilities, CG Power and Industrial Solutions said in a statement.

"The Board of Directors of the company have approved a capital expenditure programme of Rs 135 crore to be implemented in the current financial year.

The capex will be spent in balancing, debottlenecking and modernising facilities at the plants to improve production and productivity", the company said.

Tube Investments of India acquired CG Power on November 26, 2020 and the board of reconstituted CG Power with Vellayan Subbiah becoming the new Chairman and Natarajan Srinivasan was appointed as the managing director.

On the financial performance, CG Power reported Rs 673.77 crore for the quarter ending March 31, 2021 as against a net loss at Rs 184.36 crore during corresponding quarter previous year.

For the year ending March 31, 2021, standalone net loss was at Rs 208.93 crore as compared to a net loss at Rs 1,799.20 crore during the same period last fiscal.

The standalone total income for the quarter under review went upto Rs 1,036.06 crore from Rs 472.20 crore registered a year ago.

For the year ending March 31, 2021 standalone total income stood at Rs 2,568.06 crore as against Rs 3,226.36 crore registered last fiscal.

Margins were impacted due to steep increase in materials costs (impact at 5 per cent sales) as the company could not procure or cover these items earlier due to financial difficulties.

According to the company, the activities in all the manufacturing locations were revived by providing need based working capital.

The fourth quarter of last financial year (January-March 2021) was the first in recent times when the manufacturing plants operated with enough working capital though the full impact could not be derived for the entire quarter.

The industrial systems division reported a 47 per cent growth on sales for the quarter under review at Rs 740 crore while the order intake was higher during the quarter at Rs 814 crore.

"Unexecuted order book as of March 2021 was at Rs 1,673 crore", it noted.

The Power Systems division registered a 40 per cent quarter-on-quarter growth at Rs 282 crore and the order intake during the quarter was higher on a year on year basis at Rs 814 crore.

The unexecuted order book in the power systems division was at Rs 1,057 crore.

On the overseas business, CG Power said apart from wholly owned subsidiary companies in Sweden, Germany, Netherlands and United States, rest of the subsidiaries were being closed.

"Entities which are under investigation will be closed after obtaining necessary approvals of the authorities," the statement said.

The company was fully cooperating in the investigation by the SFIO (Serious Fraud Investigation Office) and once the outcome of investigations are know, further steps as necessary would be taken, CG Power said.