Cranes for growth

Updated: Aug 27 2008, 06:35am hrs
Sanghvi Movers growth drivers in the near future will be increasing topline and higher operating margins coupled with continuous capacity addition in fleet size. Its topline and bottomline has shown a growth of 48% and 56%, respectively, in the June quarter 2008.

In FY2008, its windmill sector contributed 48% to the total revenue. Sanghvi Movers is a dominant player in crane-hiring services -- highly dependent on infrastructure spending in the country -- commanding more than 50% in the domestic market.

The company provides services like heavy lifting, plant erection and maintenance.

It has already added 19 cranes as part of its planned expansion to increase fleet size by 55 cranes by FY09.

Deployment in cranes was Rs 66 core till the June quarter, out of a total outlay of Rs 250 crore.

Sanghvi Movers is quite sensitive to interest rate movements owing to higher debts.

This is because it is into a high margin, highly capital-intensive business.

Crane services are needed in all large or medium projects; whether it is installation of windmills or deploying machinery at plant sites.

The company can cater to wide sectors considering its fleet portfolio, which includes crawler cranes, hydraulic truck-mounted telescopic and trailers.

The company could benefit extensively from large greenfield projects coming in refineries, steel, cement, power and engineering in the next two to three years.

It could cater to the need in the power sector considering that it has more cranes of higher capacity.

Also to tap into the opportunity involved in upcoming nuclear projects, Sanghvi Movers has ordered a 1400 tonne capacity crane.

On the flip side, few customers contributing majority of its revenues is a concern for the company.

Contributed by Rahul Jain