Ready To Power Ahead

Chennai-based BGR Energy Systems is in a sector that is on the cusp of big growth. It supplies systems and equipment, and offers turnkey engineering project contracting for the power and oil sectors. Its sales have risen from a mere Rs 523 crore in 2006-07 to Rs 3,076 crore in 2009-10 — an average 88 per cent growth. Meanwhile, profits have risen from Rs 26 crore to Rs 210 crore over the same period — an average 107 per cent growth over the period.

BGR has a big order book worth Rs 9,317.3 crore as of December 2010, over three times its turnover in 2009-10. Of this, orders worth Rs 8,641.2 crore are for power and electrical projects. The government is targeting an additional power-generation capacity of 100,000 MW in the 12th Five-year Plan (2012-17). Says Arvind Mahajan, executive director of KPMG: "BGR is one of the early players that focused on state government power projects. Importantly, it completed projects on time and profitably."

BGR's joint venture manufacturing facilities may be operational by 2012. As making boilers is technology intensive, it will help BGR move up the value chain, and be in the league of the Thermaxes and the L&Ts.

(This story was published in Businessworld Issue Dated 23-05-2011)