Though sales volume rose over 20% and the company reported its highest ever production, it has not got translated into better realisations, which is reflected in the profit margins. OPM for FY09 was down at 19.77% compared to 24.05% in FY08 and NPM was down at 13.38% as against 16.10% in FY08.
The performance of the wire rod manufacturing unit at Raipur, Chhattisgarh has been good as the unit operated more than its rated capacity contributing significantly to the bottom line. The company has commissioned its 25 MW power plant during the year which has taken the total power generation capacity of the company to over 100 MW. This will help bring down the costs in the current fiscal.
The company is already in the process of doubling its steel making capacities in the entire chain of integrated steel operations. Encouraged by the performance of the existing wire rod mill the company has taken steps to further augment its capacity wire rod production capacity. In addition, one of the existing mills is being modernized to expand its product mix to enable it to manufacture TMT bars as well, which is expected to be completed by August this year. All these expansion plans are expected to increase the present volumes by more than 50% in the ensuing year. and the company is expected to maintain this growth momentum in the future years also. The company is taking steps to get the iron ore mines in Chattisgarh as well as in Orissa operational in second half of FY10. In addition, Madanpur coal block allotted to the company in JV with other companies is expected to be operational by end of the current financial year. This shall cater to the increased coal requirement of the steel and power operations of the company.