The Videocon Group is charting out a fresh investment outlay for Q2 2009-10 to the tune of Rs 700 crore to grow its oil business. The group is planning to infuse Rs 100 crore this year to expand its retail business, apart from Rs 500 crore in new real estate projects over the next four years.
This is to revive the company?s dented bottomline to the tune of 70% for the fourth quarter ended 2008-09. ?The decision comes at a time when oil prices has touched 65 dollars a barrel in Q1 2009-10, as compared to 145 dollars in October 2008,? Videocon Industries chief financial officer S M Hegde told FE.
According to Hegde, ?During Q4 FY08, oil prices were to the tune of 145 dollars, as compared to Q4 FY09 which is 45 dollars. This has mainly dented our bottomline by 70% as oil business contributes 60% to our bottomline. Hence, we can grow our business primarily by getting more oil in the next 16 to 18 months. And if the oil prices continue to be at 65 dollars a barrel for the next two quarters, then we will be able to achieve reasonable revenues from the oil business, similar to what we are generating from Q1 2009-10.?
As part of the strategy, Videocon has aggressively started exploring 10 oil blocks at Ravva oil field which has a capacity to produce up to 10,000 oil barrels a day, Hedge said. ?We are also speeding up oil exploration in Brazil which has a capacity to produce up to 800 mn oil barrels a day in volumes which is worth $1.2 billion in valuation.? Besides, Videocon Industries Ltd is currently in the process of exploring oil blocks spread across Istanbul, Mozambic and Australia.
Videocon Realty & Infrastructure Ltd is planning to infuse Rs 500 crore to set up new real estate projects in various lands spread across Kolkata, Mumbai which is owned by Videocon group. Hedge explained, ?We have roped in Shapoorji Pallonji as our contractors to develop IT park, a business hotel and commercial building in Kolkata. The project is being developed at our land we had earlier taken over from Philips India. Apart from Shapoorji Pallonji, we plan to initiate talks with Larsen & Toubro (L&T), Ahluwalia & Co to be our contractors for other upcoming real estate projects.?
Apart from Kolkata, Videocon Group also owns land at Chandivali and Powai in Mumbai which is under consideration to develop similar such projects which will also include residential projects.
According to Hegde, ?As for retail operations, Videocon Industries is planning to set up 60 ?Digi World?, exclusive whereby only Videocon branded products would be sold. There are 15 ?Digi World? currently operational and the remaining would be launched in metros and Tier II cities in a phased manner. We aim to utilise retail operations of ?Digi World? to sell 1.5 million DTH-embedded LCD TVs in this financial year.?