Orders expected from global customers
The Board of Pitti Engineering Limited has approved Rs.2capex plans for enhancing capacities at its Aurangabad and Hyderabad plants after reviewing the global pandemic COVID-19 situation on the company’s operations.
The expansion plan is to increase installed capacity from 36,000 MT to 46,000 MT for sheet metal components and from 247,600 hours to 405,600 hours for machining.
Both the Hyderabad and Aurangabad facilities will have new fabrication and shaft making segments to meet demand during the next three years.
The company will also start in-house manufacturing of bought out components and optimize its supply chain. It would also result in an increased level of automation at the plants and reduce dependence on labour.
The residual long-term order book with the company as on March 2020 stands at Rs.600 crore comprises of engineering products catering to user industries like Diesel and electric locomotives, data farms, consumer durables, renewable energy.
The other prestigious products include Power Systems for Data Firms (from Cummins Generators), Propulsion Systems for Electric Vehicles, Various Sub-assemblies for Intercity Passenger and Freight movement Components for Mass Urban Transit Systems (from Siemens and Alstom), and Renewable Energy (from ABB).
The approval was announced on 27 June 2020 after Pitti announced a profit after tax of Rs.17.10 crore for the financial year 2020. Total revenue from operations was Rs.525.06 crore and EBITDA was Rs.77.72 crore.
Commenting on the Results, Akshay Pitti, Vice Chairman and Managing Director, said, “We have witnessed marginal de-growth during the current year, due to our inability to deliver finished goods to our customers on account of lockdown imposed in the second half of the March.
“Our operations are marginally impacted by COVID-19 outbreak and lockdown. Our orders are intact as the majority of them are long term in nature.”
Pitti pointed out that worldwide capital goods players were operating on just in time inventories for the last couple of years. “The suppliers are exhausted and tremendous order flow is expected to just meet the current demand in capital goods sectors especially in high value-added products, wherein we have a presence.”
The company’s well-crafted strategy to cater to multiple sub-sectors in the same segment based on its more than two decades of experience really paid off.
“This has insulated company from many cyclical demand curves in the capital goods sector,” he said. fiinews.com