The Hindu Business Line : Premier Explosives in strategic radar

Some fund managers have started taking a serious look at the Premier Explosives counter. According to market circles, the stock, which had attracted lukewarm interest from the domestic and overseas institutions in the recent years, has come under research focus for a number of fund houses because of change in its business dynamics.

The company, one of the three in the country manufacturing the entire range of explosives and accessories for the civil/industrial requirement, is poised to become a defence/strategic industry supplier through capacity expansion, including missile fuel.

Premier would supply the fuel at a higher than normal margin and an undisclosed quantity to Satish Dhawan Space Centre, Sriharikota (SHAR). It also obtained a 10-year Rs 7 crore per annum renewable O&M contract from SHAR for its second propellant plant.

Mr A.N. Gupta, Vice-Chairman and MD, confirmed to Business Line from Hyderabad the developments regarding missile fuel, but declined to detail because of “strategic” reasons.

He said that Premier, which already produces the fuel, would double its capacity in about two years. For the new project, it has already bought 150 acres of land off Hyderabad, near its existing plant, and purchase of another 100 acres from Indian Space Research Organisation at a subsidised rate would be complete in next three months. The complete capex plan would be ready by six months, he added.

Premier has two overseas joint ventures in Turkey and Georgia. It also has 30 per cent equity interest in Premier Explochem, an explosive manufacturing outfit in Nashik. During FY 2004-05, it had hived off an explosives outfit as part of refocusing strategy. It also sold its Mushroom division assets for Rs 17.50 crore in April this year.

The stock finished flat at Rs 47 with 13,166 shares changing hands on the BSE.

Jayanta Mallick

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