Energy and environment solutions provider Thermax Ltd has posted a 10.3-per cent decline in consolidated net profit at ₹48.96 crore for the first quarter ended June 30. Speaking to BTVI , Thermax MD and CEO MS Unnikrishnan explains the investment cycle across sectors. While there is an increase in capacity utilisation in cement, the investment cycle is muted for power and steel. There is a rising demand for solar power, he says. The company expects to end FY17 with a “decent” profit, he adds. Excerpts:

Are there visible signs of investment pick-up across industry, especially in terms of capacity expansion? Which sectors are still seeing some stress? I don’t expect any improvement in steel and power in the current year. However, cement is moving upwards in terms of capacity utilisation — the Southern part is currently hovering around 68 per cent and North India has moved up to 70 per cent. So continuation of the market sentiments and similar investments, in terms of roads, buildings, and constructions, should see the capacity-utilisation reaching at least 80-85 per cent somewhere next year. I believe we will see ordering in cement capacity for the next year.

Steel will depend a lot more on what is going to happen for global consumption. China has got 800-odd million tonnes of steel capacity, of which half will goidle. And they are going to dump the cheap steel everywhere. How we protect our investors in the country will be the basis for the investment to happen in the steel industry. I don’t expect anything to happen for at least a year or a year-and-a-half.

As far as power is concerned, there are far too many issues to be resolved. You will find solar going up. In the thermal power area, we are at least two-plus years away from the investment cycle to start picking up.

You said recently that you are looking at bidding for selective solar projects... We have two specific agendas. The first one is solar PV (photovoltaic) on the rooftop. Last year, we did more than 10 megawatt-equivalent projects. This year, I am expecting it to be at least 50 megawatts.

And another area is solar thermal. We are already proliferating it across the country. A lot of industries in the country have gone for it.

We are now introducing hybridisation of thermal power plants, where people breed steam for the power plants and use it for heating. Personally, we can create additional capacity in the country for 4,000-5,000 megawatts if the thermal power plants in India were to go for this. That is our agenda for solar thermal.

At present, a massive order intake has been subdued. What kind of potential do you see in overseas projects? International market is as good or bad as the Indian market; especially South-East Asian, West Asia and Africa, where we normally focus on. Enquires are almost the same level compared with the previous year. One has to be very aggressive to take orders in the international market today on account of the fact that we have got new competitors coming from Europe and Japan because they have weakened their currencies a lot. But we are able to manage.

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