AREVA and PGCIL

Home > Money > Report

Pricing pressure hits Areva's bottomline

Promit Mukherjee / DNA

Thursday, July 30, 2009 2:50 IST

Email

Print

Text

Share

Mumbai: A severe pressure on prices in the domestic market has taken a toll on transmission and distribution major Areva T&D India's bottomline in the second quarter of calendar year 2009.

Areva T&D, which is a subsidiary of the France-based nuclear giant Areva and is one of the major transformer and substation manufacturers in India, is currently on a major expansion spree. The company had last year commissioned three facilities across the country.

Rathin Basu, country head, Areva T&D India, said, "The market is still flat and there is a sense of panic among the players, which is putting pressure on prices." He was taking to analysts through a conference call on Wednesday.

He said the transmission and distribution market is witnessing a continuous price fall since September 2009 and the first half of the calendar year has seen practically no growth. While the transmission market has seen a drop in prices of 15-20%, the distribution market has been hit harder and prices have fallen by 20-25%.

This has taken a toll on the company's bottomline, which is down by almost 14% in the second quarter of the calendar year. For the quarter ended June 2009, the company posted a net profit after tax (PAT) of close to Rs 50 crore against Rs 65 crore in the same period last year.

"However, for the first half, the company booked a profit of Rs 101 crore, which is a 32% growth over the last three years," he said. The company also saw 24% fall in order intake in the first half, which stood at Rs 1,757 crore against Rs 2,323 crore in H12008. However, orders grew 18%

SOURCE