The Hindu Business Line : Gujarat NRE hopes for Rs 350-cr turnover

GUJARAT NRE Coke Ltd (GNCL), riding on a windfall price escalation for low ash metallurgical coke, has set its eyes on closing the current fiscal with a turnover of over Rs 350 crore.

The company, which is set to scale up its production from 3.24 lakh tpa to one million tpa by April next mainly by way of a new plant at Kandla, is looking at its profits growing at least three-fold for the current fiscal ending September 30.

Mr Arun Kumar Jagatramka told Business Line that the company had never had it as good before with the product realisation of coke having skyrocketed from Rs 6,000 per tonne in late 2003 to Rs 17,000 per tonne. GNCL, which had posted a net profit of Rs 17 crore on a turnover of Rs 176 crore during the last fiscal, had already recorded a net profit of Rs 6.5 crore on a turnover of Rs 70 crore during its first quarter.

"This fiscal has played out almost as if the company had won a lottery ticket. We realise it is not going to be sustainable over a long term. However, GNCL has contracted to sell its products at the current prices till December 2004.

"We are set to surprise many with our performance this year which could easily top Rs 350 crore. And the company will keep this momentum going with the enhanced volumes. Even after factoring in modest coke prices at around Rs 11,000 per tonne, GNCL would reach a sales of Rs 500 crore by 2005-06," Mr Jagatramka said.

GNCL, which has now revised its profitability outlook for the year in line with the coke prices having tripled over the last one year, feels it is ideally positioned to push its new plant at Kandla being set up at a cost of Rs 55 crore.

GNCL has proposed to place privately the Rs 25 crore worth of NCDs to part finance its ongoing expansion at Kandla. GNCL, whose current facility is located at Jamnagar, is betting on its second production facility at Kandla as the location advantage would give it access to imported Australian and South African coking coal, its principal raw material.

Some of GNCL's major consumers include Nirma, GHCL, SAIL and Kalyani Steel. With commissioning of its Kandla facility in October, the company would be targeting the coke-starved northern Indian hinterland to shore up the numbers that may be lost once the coke prices return to normal.

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