TECPRO SYSTEMS LIMITED
ANNUAL REPORT 2011-2012
It is a pleasure to write to you once again. India is on a growth
trajectory with a big need to develop its industrial, urban and rural
infrastructure for the sustainable development of the country. With huge
investments envisaged in infrastructure projects for power, steel, cement,
iron ore and aluminum industries, world-class airports and ports, railways
and communication networks, robust demand for material handling equipment
is anticipated in the next few years.
Although the Indian infrastructure sector is currently facing various
challenges like rising interest rates, inflation and sluggish order
inflows, it continues to be a key driver of the nation's economic progress.
The current slowdown is temporary as infrastructure growth is pivotal in
order to achieve the 7%+ GDP growth targeted by the Government. The slow
pace of reforms and rising interest costs have hampered the capital
expenditure plans across various industries. However, several recent policy
initiatives have been introduced by the government in order to overcome
these hurdles and spur investments in infrastructure.
Despite the current slowdown, we remain confident that the capital
expenditure cycle is deferred but not derailed as investments in
infrastructure projects are vital for the strong economic growth envisaged
by the government. Power constitutes 30% of the total infrastructure
investment in the country. Increase in peak demand will support the need
for timely execution of power projects, thus providing a strong base for
growth of Boiler, Turbine, Generator (BTG) and Balance of Plant (BoP)
service providers in the country. The Power Ministry has pitched for
capacity addition target of about 76,000 MW in the XII Plan. This presents
opportunities worth ~Rs. 1.4 trillion for BoP services across the country.
Tariff hikes from State Electricity Boards and release of the tenders for
BTG and BoP orders in the forthcoming fiscal will set the pace for
recovery. Also the initiatives taken by the Government towards overall
infrastructure development, both in urban and rural areas, in all segments
like roads, housing, dams, mining, water etc. will give a boost to the
Steel and Cement industry, resulting in more capital expenditure in the
infrastructure sector. This coupled with moderating inflation and interest
rates will help revive the capital goods industry and fasten the pace of
order inflows. We strongly believe that your Company will be at the
forefront to capitalize on this opportunity once these promising signs are
Tecpro intends to maintain its competitive edge by enhancing its
manufacturing capability and expanding its service portfolio. In the last
fiscal, Tecpro completed the acquisition of Ambika Projects (India) Private
Limited in the water & waste water treatment space enabling Tecpro to
increase its share of in-house scope of services in the BoP segment. The
Company also acquired a Pune based company, Eversun Energy Private Limited,
engaged in the business of EPC of solar power projects, with an intent to
make a foray into Renewable Energy (Solar) Segment adding another vertical
to its existing business segments in power sector. Our collaboration with
Nanjing Triumph Kaineng Environment and Energy Company Limited (NTK) of
China for Waste Heat Recovery (WHR) power projects is scaling up well. We
have already won projects worth Rs. 3.2 billion in WHR. Having already
demonstrated our capabilities in the cement sector, we are looking to
extend our offerings in Waste Heat Recovery to the steel sector.
We have a good bid pipeline across all our offerings and are confident that
many of these bids will be converted into orders shortly. Besides the coal
and ash handling segment, which is the Company's established business and
where we continue to win orders regularly, we are expecting good enquires
in the BoP segment this year. Further, in addition to the indigenous
market, we are expecting a few orders internationally through our
subsidiary in Singapore.
We are confident that the inherent strength of our business model will help
us in navigating the ongoing sluggish pace of economy and bagging new
orders. We will keep our focus on growth and liquidity management, an
integral part of any working capital intensive industry.
I would like to thank you, our shareholders, for your confidence in Tecpro.
On behalf of my competent and committed colleagues, I assure you of our
total dedication and tireless efforts, in a though environment, towards the
objective of maximizing returns for all stakeholders and we will do our
utmost to continue our profitable growth trajectory.
Ajay Kumar Bishnoi
Chairman & Managing Director