ATL mulls Rs 45-cr plant for missile comm devices

( Business Standard ) : Aishwarya Telecom Limited (ATL), a Hyderabad-based company engaged in the manufacture of telecom and fibre optic products and cable fault locators, is betting big on the Indian defence sector. Towards this, it is contemplating setting up a new facility in Hyderabad for production of missile communication equipment, entailing an investment of Rs 45 crore.
“We have been empanelled by the defence organisations and labs to manufacture missile communication equipment. As per the mandate given by the defence organisations, we should set up a manufacturing plant in the next six months. We have already identified land, and the plant will come up either at a special economic zone (SEZ) near the Shamshabad airport or the Fab City,” GR Manohar Reddy, managing director of Aishwarya Telecom, told Business Standard.
It may be recalled that post the Pakistan-China defence cooperation agreement, the Indian Army had placed orders for 3,000 missiles with Bharat Dynamics Limited, worth close to Rs 18,000 crore. Reddy said the zero-debt company was planning to raise the required funds either through banks or ECBs (external commercial borrowings), and expected the fund-raising exercise to be completed in 45 days from the day the defence organisations awarded the contracts to ATL.
“We expect the defence contracts to be in place by April 2011, and are hopeful of garnering revenues of Rs 100 crore per year for five years through them,” he added.
The 15-year-old company, which raised Rs 15 crore through an initial public offering (IPO) in May 2008, has already been working with defence labs and organisation on critical projects. The defence sector contributed 20 per cent to its overall revenues last year, while telecom accounted for 70 per cent with the remaining coming in from railways and exports.
“This (defence) is where our strength lies and hence we decided to focus more on defence organisations and labs. With the sector poised to seize new opportunities, we expect defence to make up 60 per cent of our revenues, starting the next financial year,” Reddy said, adding the company was expecting its revenues to remain flat at Rs 45 crore in the current financial year.
Aishwarya Telecom’s scrip ended the trade at Rs 14.30 on the BSE on Friday, down 4.98 per cent over the previous close of Rs 15.05