1

SYNOPSIS

AIA Engineering Ltd was established in 1979 at Ahmedabad, INDIA. The company has received ISO 9001 Certified for quality management. The company is engaged in business of designing, developing, manufacturing, installing and servicing of high chromium wear, corrosion and abrasion resistant parts. The Company products are mainly used by cement, mining and thermal power generation industries. During the quarter, the company has reported Net Profit increased to Rs.292.84 million from Rs.254.62 million in previous year same quarter. The Company is second largest Hi-Chrome casting producer in the World. Vega Industries is a wholly owned subsidiary of AIA Engineering, exclusively supplying its products, providing customer support and technical services to customers. Net Sales and PAT of the company are expected to grow at a CAGR of 24% and 14% over 2010 to 2013E respectively. Today Company services different mineral ores like iron, copper, gold, platinum and zinc for blue chip mining customers in countries like USA, Canada, Brazil, South Africa, Australia, etc.

Years Net sales EBITDA Net Profit EPS P/E

FY 11 9895.42 2106.81 1297.49 13.76 26.17

FY 12E 13069.29 2419.84 1510.73 16.02 22.48

FY 13E 15683.15 2892.44 1819.38 19.29 18.66

Stock Data:

Sector: Construction & Engg.

Face Value Rs. Rs.2.00

52 wk. High/Low (Rs.) 400.95/250.10

Volume (2 wk. Avg.) 588.00

BSE Code 532683

Market Cap (Rs.In mn) 33955.20

Share Holding Pattern

1 Year Comparative Graph

AIA Engineering Ltd BSE SENSEX

C.M.P : Rs.360.00 Target Price : Rs.410.00 Date : 14th April 2012 BUY

AIA ENGINEERING LTD

Result Update: Q3 FY 12

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Peer Group Comparison

Name of the company CMP(Rs.) Market Cap. (Rs.Mn.) EPS(Rs.) P/E(x) P/Bv(x) Dividend (%)

AIA Engineering 360.00 33955.20 13.76 26.17 4.04 150.00

SKF India 698.05 36809.90 39.54 17.65 3.64 75.00

Graphite India 92.60 18091.80 9.19 10.08 1.29 175.00

Esab India 535.35 8240.70 30.82 17.37 3.89 150.00

Investment Highlights

Q3 FY12 Results Update

AIA Engineering Ltd disclosed results for the quarter ended Dec 2011. Net sales

for the quarter increased by 36% to Rs.3341.83 million as compared to

Rs.2465.80 million during the corresponding quarter last year. During the

quarter, the company has reported Net Profit increased to Rs.292.84 million from

Rs.254.62 million in previous year same quarter. The Basic EPS of the company

stood at Rs.3.10 for the quarter ended Dec 2011.

Quarterly Results - Standalone (Rs in mn)

As At Dec-11 Dec-10 %change

Net sales 3341.83 2465.80 36

Net Profit 292.84 254.62 15

Basic EPS 3.10 2.70 15

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Basic EPS of the company stood at Rs. 3.10

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Break up of Expenditure

Expenditure for the quarter stood at Rs.2862.41mn, which is around 41% higher

than the corresponding period of the previous year. Consumption of Raw Material

cost of the company for the quarter accounts for 46% of the sales of the company

and stood at Rs.1543.29mn from Rs.1178.20mn of the corresponding period of

the previous year. Other Expenditure cost increased 42%YoY to Rs.610.66mn

from Rs.430.35 mn and accounts for 18% of the revenue of the company for the

quarter.

OPM and NPM for the quarter stood at 15% and 9% respectively from 19% and

10% respectively of the same period of the last year.

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Company Profile

AIA Engineering, incorporated as Magotteaux (India) in 1991 was a joint venture

enterprise with Magotteaux International Belgium. The company is engaged in

business of designing, developing, manufacturing, installing and servicing of high

chromium wear, corrosion and abrasion resistant parts. These products are mainly

used by cement, mining and thermal power generation industries.

AIA Export was merged with the company on September 2003. The company acquired

control over Vega UK in 2003, which led all Vega companies become wholly owned

subsidiaries of AIA Engineering. A subsidiary was set up in Canada under the name

Vega Industries (Canada) Inc in 2003-04. In December 2004, company took over

business of Gray Cast Foundry Works (GCFW). The same year it also acquired

manufacturing Division of Centricast Enterprises.

AIA's subsidiaries Vega Industries are located in the Middle East, USA, UK and

Canada. The company’s UAE subsidiary has branch office in Australia and a

representative office in the Philippines. The company has received ISO 9001:2000

certification for quality management. On February 2008, Paramount Centrispun

Castings (PCCL) became wholly-owned subsidiary of the company.

The company has clientele namely ACC, Gujarat Ambuja Cement, Kudremukh Iron

Ore Company, Hindustan Zinc, Bharat Aluminium Company, thermal power plants,

OEMs, etc.

Business Areas

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Financial Results

12 Months Ended Profit & Loss Account (Standalone)

Value(Rs.in million) FY10A FY11A FY12E FY13E

Description 12m 12m 12m 12m

Net Sales 8192.40 9895.42 13069.29 15683.15

Other Income 127.12 122.60 91.68 100.84

Total Income 8319.52 10018.02 13160.97 15783.99

Expenditure -6260.82 -7911.21 -10741.13 -12891.55

Operating Profit 2058.70 2106.81 2419.84 2892.44

Interest -7.62 -0.24 -4.51 -4.74

Gross Profit 2051.08 2106.57 2415.33 2887.71

Depreciation -188.06 -213.82 -248.69 -278.53

Profit before Tax 1863.02 1892.75 2166.64 2609.18

Tax -637.4 -595.26 -655.91 -789.80

Profit after Tax 1225.62 1297.49 1510.73 1819.38

Equity Capital 188.64 188.64 188.64 188.64

Reserves 7249.48 8218.26 9728.99 11548.37

Face Value(Rs.) 2.00 2.00 2.00 2.00

Total No. of Shares 94.32 94.32 94.32 94.32

EPS 12.99 13.76 16.02 19.29

*A=Actual, *E=Estimated

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Quarterly Ended Profit & Loss Account (Standalone)

Value(Rs.in million) 30-Jun-11 30-Sep-11 31-Dec-11 31-Mar-12

Description 3m(A) 3m(A) 3m(A) 3m(E)

Net Sales 2716.72 2933.71 3341.83 4077.03

Other Income 34.29 23.91 15.57 17.91

Total Income 2751.01 2957.62 3357.40 4094.94

Expenditure -2138.83 -2396.72 -2862.41 -3343.17

Operating Profit 612.18 560.90 494.99 751.77

Interest -0.46 -1.37 -1.49 -1.19

Gross Profit 611.72 559.53 493.5 750.58

Depreciation -59.70 -61.67 -65.29 -62.03

Profit before Tax 552.02 497.86 428.21 688.55

Tax -138.77 -182.09 -135.37 -199.68

Profit after Tax 413.25 315.77 292.84 488.87

Equity Capital 188.64 188.64 188.64 188.64

Face Value(Rs.) 2.00 2.00 2.00 2.00

Total No. of Shares 94.32 94.32 94.32 94.32

EPS 4.38 3.35 3.10 5.18

*A=Actual, *E=Estimated

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Key Ratio

Particulars FY10 FY11 FY12E FY13E

EPS (Rs.) 12.99 13.76 16.02 19.29

EBITDA Margin (%) 25.13% 21.29% 18.52% 18.44%

PAT Margin (%) 14.96% 13.11% 11.56% 11.60%

P/E Ratio (x) 27.86 26.17 22.48 18.66

ROE (%) 16.48% 15.43% 15.23% 15.50%

ROCE (%) 25.09% 22.48% 21.86% 22.24%

EV/EBITDA (x) 16.59 16.12 14.03 11.74

Book Value (Rs.) 78.86 89.13 105.15 124.44

P/BV 4.59 4.04 3.42 2.89

Charts:

9

10

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Outlook and Conclusion

At the current market price of Rs.360.00, the stock is trading at 22.48 x FY12E and 18.66 x FY13E respectively.

Price to Book Value of the stock is expected to be at 3.42 x and 2.89 x respectively for FY12E and FY13E.

Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.16.02 and Rs.19.29 respectively.

During the quarter, the company has reported Net Profit increased to Rs.292.84 million from Rs.254.62 million in previous year same quarter.

Net Sales and PAT of the company are expected to grow at a CAGR of 24% and 14% over 2010 to 2013E respectively.

The Company is second largest Hi-Chrome casting producer in the World.

On the basis of EV/EBITDA, the stock trades at 14.03 x for FY12E and 11.74 x for FY13E.

We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.410.00 for Medium to Long term investment.

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Industry Overview

The Indian construction industry Construction activity is an integral part of a country’s infrastructure and industrial

development. It includes hospitals, schools, townships, offices, houses and other

buildings; urban infrastructure (including water supply, sewerage, drainage);

highways, roads, ports, railways, airports; power systems; irrigation and agriculture

systems; telecommunications etc. Covering as it does such a wide spectrum,

construction becomes the basic input for socio-economic development. Besides, the

construction industry generates substantial employment and provides a growth

impetus to other sectors through backward and forward linkages. It is, essential

therefore, that, this vital activity is nurtured for the healthy growth of the economy.

With the present emphasis on creating physical infrastructure, massive investment is

planned during the eleventh Plan. The construction industry would play a crucial role

in this regard and has to gear itself to meet the challenges. In order to meet the

intended investment targets in time, the current capacity of the domestic construction

industry would need considerable strengthening.

In India, construction is the second largest economic activity after agriculture.

Investment in construction accounts for nearly 11 per cent of India’s Gross Domestic

Product (GDP) and nearly 50 per cent of its Gross

Fixed Capital Formation (GFCF) Fund injection into the sector could go up to US$

124.65 billion by FY2010. Construction accounts for nearly 65 per cent of the total

investment in infrastructure and is expected to be the biggest beneficiary of the surge

in infrastructure investment over the next five years.

The Indian construction industry recorded a consistent double-digit year-on-year

growth (12%) during 2000-2005, and is expected to grow at 25-30% during 2005-

2010. The key drivers of this growth are government investment in infrastructure

creation and real estate demand in the residential and industrial sectors.

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The industry is experiencing increasing polarization between large and small players.

These players are increasing their market share through large-scale contracts, joint

ventures, and foreign operations. Though an increasing number of small players are

also entering the market, most of them do not have the resources to bid for big

contracts. The construction segment constitutes a significant part of infrastructure

development in the economy. The following table shows the construction investments

figures in the various areas of infrastructure development:

(Rs. in billion)

FY02-FY06 FY07-FY11

Roads 1167 2306

Urban infrastructure 536 1150

Power 578 861

Irrigation 514 744

Railways 225 639

Others 193 429

Total 3,213 6129

Demand for construction has resulted in the following macro trends:

The increasing spend in the infrastructure sector has resulted in an increased order

book for construction companies thereby easing the supply – demand competitive

pressure.

Margins of construction companies were adversely impacted by increase in prices of

inputs in the past especially steel, aggregate and now cement. Whilst commodity

prices continue to exhibit volatility, price escalation clauses are being used to allow for

some protection. Whilst partly mitigated, this remains an area of concern.

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Construction companies are moving towards public-private partnership, raising funds

from the market to finance these projects. Whilst some participants, especially the

smaller ones, have adopted a fragmented approach to the market, bidding

aggressively, the more established players who have financial strength, experience and

access to technology and an appetite to undertake large contracts are adopting a

selective approach in their order mix and client selection, leading up to risk

management on margins. To accelerate and increase public private partnerships in

infrastructure, two major initiatives have been taken by the GoI provision of viability

gap funding and Establishment of India Infrastructure Finance Company Limited.

Construction industry is facing the challenges of outdated land and property

ownership regulations, infrastructural bottlenecks, and a shortage of civil engineers.

The construction sector has major linkages with the building material industry since

construction material accounts for sizeable share of the construction costs. These

include cement, steel, bricks/tiles, sand/aggregates, fixtures/fittings, paints and

chemicals, construction equipment, petro-products, timber, mineral products,

aluminum, glass and plastics.

Engineering

The engineering sector is the largest segment of the overall Indian industrial sector.

India has a strong engineering and capital goods base. The important groups within

the engineering industry include machinery & instruments, primary and semi finished

iron & steel, steel bars & rods, non-ferrous metals, electronic goods and project

exports. The engineering sector employs over 4 million skilled and semi-skilled

workers (direct and indirect).

The sector can be categorized into heavy engineering and light engineering segments.

Heavy engineering segment forms the majority of the engineering sector in India. India

has a well-developed and diversified industrial machinery/ capital base capable of

manufacturing the entire range of industrial machinery. The industry has also

managed to successfully develop advanced manufacturing technology over the years.

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Among the developing countries, India is a major exporter of heavy and light

engineering goods, producing a wide range of items. The bulk of capital goods required

for power projects, fertilizer, cement, steel and petrochemical plants and mining

equipment are made in India. The country also makes construction machinery,

equipment for irrigation projects, diesel engines, tractors, transport vehicles, cotton

textile and sugar mill machinery.

Sector structure/Market size

The steel industry in India has been moving from strength to strength and according

to the year-end review by the Press Information Bureau, India has emerged as the

fourth largest producer of steel in the world and the second largest producer of crude

steel.

Significantly, state-owned steel maker, Steel Authority of India (SAIL), which reported

a net profit of US$ 571 million in January-June 2009, has become the most profitable

steel company globally, beating steel majors such as ArcelorMittal, Posco, Bao Steel

and Nippon in the half yearly profits.

Production

Steel production reached 28.49 million tonne (MT) in April-September 2009.

The National Steel Policy has a target for taking steel production up to 110 MT by

2019–20. Nonetheless, with the current rate of ongoing Greenfield and brownfield

projects, the Ministry of Steel has projected India's steel capacity is expected to touch

124.06 MT by 2011–12. In fact, based on the status of memoranda of understanding

(MoUs) signed by the private producers with the various state governments, India's

steel capacity is likely to be 293 MT by 2020.

Consumption

India accounts for around 5 per cent of the global steel consumption. Almost 70 per

cent of the total steel used is for kitchenware. However, its use in railway coaches,

wagons, airports, hotels and retail stores is growing immensely.

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India's steel consumption rose by 6.8 per cent during April-November 2009 over the

same period a year ago on account of improved demand from sectors like automobile

and consumer durables.

A Credit Suisse Group study states that India's steel consumption will continue to

grow by 16 per cent annually till 2012, fuelled by demand for construction projects

worth US$ 1 trillion.

The scope for raising the total consumption of steel is huge, given that per capita steel

consumption is only 35 kg – compared to 150 kg across the world and 250 kg in

China.

Steel players like JSW Steel and Essar Steel are increasing their focus on opening up

more retail outlets pan India with growth in domestic demand. JSW Steel currently

has 50 such steel retail outlets called JSW Shoppe and is targeting to increase it to

200 by March 2010. They expect at least 10-15 per cent of their total production to be

sold by their retail outlets.

Essar Steel which currently has over 300 retail outlets across the country, and plans

to set up 5,000 outlets of various formats soon. It expects to sell 3MT of steel through

the retail route in two years.

Exports

Out of India's annual iron ore production of more than 200 MT, about 50 per cent is

exported.

India's iron ore exports more than doubled to 9.3 million tonne in October 2009 as

compared to 4.4 million tonne in the same month a year ago on the back of increase in

demand from Chinese steel producers, as per a joint study by a group of iron ore

exporters.

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Iron ore is a key input in steel making. The country’s iron ore exports during April-

October 2009 period grew 20 per cent over the year ago period to 53 million tonne, as

per the study.

Investments

A host of steel companies have lined up major investment proposals. Furthermore,

with an expanding consumer market, the Indian steel industry is likely to receive huge

domestic and foreign investments.

The domestic steel sector has attracted a staggering investment of about US$ 236

billion, according to the Minister of State for Steel A Sai Prathap.

This consists of nearly 222 MoUs signed between the investors and various state

governments mostly in the states of Orissa, Jharkhand, Chhattisgarh & West Bengal.

• According to the Investment Commission of India investments of over US$ 30

billion in steel are in the pipeline over the next 5 years.

• Tata Steel has raised US$ 500 million by issuing 'global depository receipts'

(GDRs) aiming at expansion of its Jamshedpur plant and overseas mining

projects.

• The state-owned Steel Authority of India Ltd (SAIL) will invest US$ 724.12

million to set up a 4-million tonne per annum steel mill at its Bhilai Steel Plant.

• SAIL is also planning to set up a 12-million tonne plant in Jharkhand.

• Stainless steel manufacturer and exporter, Varun Industries, is setting up a

US$ 171.63 million stainless steel-cum-alloy steel plant at Rohat, Jodhpur.

• India’s largest engineering conglomerate Larsen & Toubro (L&T) and state-

owned Nuclear Power Corporation of India Limited (NPCIL) have formed a US$

370.09 million joint venture for specialized steel and forging products.

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Government Initiative

Subsequent to the recent fall in international prices of commodities and to protect

Indian producers, the Indian government has announced some changes in customs

duty rates, which were effective from November 2008.

The government has removed full exemption of customs duty on some industrial and

agricultural commodities. Iron and steel products like pig iron, spiegeleisen, semi-

finished products, flat products and long products are now subject to a basic custom

duty of 5 per cent ad valorem.

The Indian government plans to invest over US$ 350 billion in industries related to

infrastructure and construction which will give a fillip to the steel sector.

Moreover, in the Union Budget 2009-10, the government has made a 23 per cent hike

in allocation for highway development and US$ 1.034 billion increase in budgetary

support to Railways which will further promote the steel industry.

Road ahead

While the demand for steel will continue to grow in traditional sectors such as

infrastructure, construction, housing, automotive, steel tubes and pipes, consumer

durables, packaging, and ground transportation, specialized steel will be increasingly

used in hi-tech engineering industries such as power generation, petrochemicals,

fertilizers, etc. The new airports and railway metro projects will require a large amount

of stainless steel.

According to an estimate, with the growing need for oil and gas transportation

infrastructure, a US$ 118 billion opportunity is waiting to be tapped by steel

manufacturers in the next five years. Indian steelmakers are set to make the most of

booming global demand for steel pipes and tubes with the government withdrawing

the 10 per cent duty on the exports of these products. According to a study by ICICI

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Direct, Indian steel companies are likely to get 19 per cent of the total global demand

in the years to come.

Power

Sector structure

As the Indian economy continues to surge ahead, its power sector has been expanding

concurrently to support the growth rate. The demand for power is growing

exponentially and the scope for the growth of this sector is immense.

According to the Central Electricity Authority (CEA), India's total installed capacity of

electricity generation has expanded from 105,045.96 MW at the end of 2001–02 to

156,092.23 MW at the end of December 2009. In fact, India ranks sixth globally in

terms of total electricity generation.

Source-wise, at the end of December 2009, thermal power plants accounted for an

overwhelming 64 per cent of the total installed capacity, producing 99861.48 MW.

Hydel power plants come next with an installed capacity of 36,885.40 MW, accounting

for 23.60 per cent of the total installed electricity generation capacity.

Besides thermal and hydel power, renewable energy sources contribute 9.80 per cent

to the total power generation in the country producing 15,225.35 MW.

Nuclear energy makes up the balance 2.60 per cent, contributing 4,120 MW.

Growth Potential

According to a report by KPMG and CII, released in December 2007, India's energy

sector will require an investment of around US$ 120 billion-US$ 150 billion over the

next five years.

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The government has revised its target of power capacity addition to 92,700 MW in the

11th Five Year Plan (2007-12), from the earlier estimate of 78,577 MW (as of June

2007) to sustain the growth momentum of the economy.

Further, according to Planning Commission estimates, renewable energy (RE) projects

worth US$ 16.50 billion, for the generation of 15,000 MW power, would come up in

the 11th Plan.

Moreover, the government has earmarked a total capital subsidy of US$ 6.88 billion

for providing electricity connections and for the distribution of infrastructure to rural

households.

Public sector power major National Thermal Power Corporation (NTPC) is planning

scale up its capacity from the present 30,000 MW to 75,000 MW by 2017.

India has launched its ambitious solar energy mission which aims to generate 20,000

MW of solar power by 2022.

Nuclear Power Generation

Subsequent to the Indo-US nuclear deal and India getting clearance from the Nuclear

Suppliers Group (NSG), nuclear power generation is likely to provide an opportunity of

US$ 10 billion in the next five years, according to a JP Morgan estimate.

Since the Indo-US nuclear deal, India has signed a crucial civil nuclear agreement

with Mongolia for supply of uranium to New Delhi. In November 2009, the Indo-

French civil nuclear agreement was unanimously adopted by the French Parliament,

paving way for companies to build nuclear power plants in India. India has also signed

a civil nuclear pact with Argentina and has reached an agreement on civil nuclear

cooperation with Canada. In December 2009, Russia and India signed an agreement to

expand nuclear cooperation. Recently, Britain and India have reached an outline

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agreement on nuclear energy cooperation and are looking at expanding ties in defence

manufacturing.

• Hindustan Construction Company (HCC) has signed a memorandum of

understanding (MoU) with the international engineering and project

management company AMEC plc, to jointly explore the application of consulting

and EPC services for the establishment of nuclear power plants in India.

• The Central government has finalised six 1,000 MW nuclear power units at

Mithivirdi in Gujarat, involving an investment of US$ 12.8 billion.

• Indian Oil Corporation Ltd (IOCL) has signed a memorandum of understanding

(MoU) with the Nuclear Power Corp of India (NPCIL) for setting up of a US$ 2.2

billion nuclear power plant.

Investments

According to research by Venture Intelligence, India’s power sector is set to emerge as

a key destination for private equity (PE) players to make investments, with close to

US$ 1.64 billion worth of infrastructure funds, mainly in power, awaiting their launch.

• National Hydroelectric Power Corporation (NHPC), the country’s largest hydel

power producer, will develop the 1,500-MW Tipaimukh hydropower project in

the north-eastern state of Manipur at an investment of US$ 1.7 billion.

• More than US$ 15.4 billion worth of investments have been lined up for various

power projects in Maharashtra, it was announced by Mr Subrat Ratho,

Maharashtra Power Secretary.

• Torrent Power Limited, has dedicated the country's biggest gas-based power

project of 1,147 MW capacity near Surat and is further scaling up generation

capacity of its plant by adding another 3,400 MW in the next five years.

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• Larsen & Toubro (L&T) will invest around US$ 5.36 billion to build its thermal

power business in the next five years. L&T Power, the wholly-owned subsidiary

of L&T, will have a generation capacity of 5,500 MW, including hydro power, by

2015.

• Bonfiglioli Transmissions, the 100 per cent subsidiary of the Italian Bonfiglioli

Group, which manufactures new generation industrial power transmission

products, plans to invest US$ 8.58 million within six months.

• Gujarat-based Adani Power Ltd (APL) will set up a coal-based thermal power

project of 1320 MW in Chhindawara district in Madhya Pradesh.

• JSW Energy, part of the JSW Group, plans to scale up its capacity to 11,390

MW which entails an investment of over US$ 10.72 billion over the next five

years.

• NTPC will incur US$ 6.32 billion in the next fiscal to build additional capacity of

4,500 MW.

Government Initiatives

The government has taken several proactive steps to open the sector for the private

players and realise the full potential of the country in the power sector.

• Introduction of the Electricity Act 2003 and the notification of the National

Electricity and Tariff policies.

• Constitution of Independent State Electricity Regulatory Commissions in the

states.

• Allowing the private sector to set up coal, gas or liquid-based thermal projects,

hydel projects and wind or solar projects of any size.

23

• Allowing foreign equity participation up to 100 per cent in the power sector

under the automatic route.

• Allowing 100 per cent foreign direct investment (FDI) in the Indian power sector

(except nuclear).

• Allowing 100 per cent foreign direct investment (FDI) in the renewable energy

sector.

• Providing income tax holiday for a block of 10 years in the first 15 years of

operation and waiver of capital goods' import duties on mega power projects

(above 1,000 MW generation capacity).

• The government has also taken up some ambitious programmes like the Ultra

Mega Power Projects (UMPP), Rajiv Gandhi Grameen Vidhyutikaran Yojana

(RGGVY), Accelerated Rural Electrification Programme and the goal of Power for

All by 2012 among others, to rapidly increase the installed capacity.

Looking ahead

A study by consultancy major McKinsey estimates India's power demand to increase

to 315 GW–335 GW by 2017, if India continues to grow at an average of 8 per cent in

that time. This would require a five- to ten-fold rise in power production, entailing

investments worth US$ 600 billion.

To fuel its rapidly growing economy, India is planning to get an additional 60,000 MW

of electricity from various hydro-power projects by the end of 2025.

The government targets providing electricity for all by 2012. Under the Rajiv Gandhi

Grameen Vidyutikaran Yojna, the Ministry of Power plans to electrify 120,000 villages

in the current Five Year Plan (2007–12).

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Moreover, the Ministry of Power and CEA have projected a total investment of US$

4.31 billion for renovation and modernisation, as well as extending the life span of

various old power plants during 11th and 12th Five-Year Plans. Of this, US$ 1.30

billion is planned for the 11th Plan and US$ 3 billion for the 12th Plan. Dec 30, check

the figures once.

This would be over and above the investment of US$ 214.50 billion proposed for the

capacity addition of 78,700 MW in the 11th Plan (2007-12) and US$ 235.95 billion to

add over 94,431 MW in the 12th Plan.

_______________ ____ _________________________ Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation

for the purchase or sale of any financial instrument or as an official confirmation of any

transaction. The information contained herein is from publicly available data or other

sources believed to be reliable but do not represent that it is accurate or complete and it

should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s

affiliates shall not be in any way responsible for any loss or damage that may arise to any

person from any inadvertent error in the information contained in this report. This document

is provide for assistance only and is not intended to be and must not alone be taken as the

basis for an investment decision.

25

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