22. Vindhya Telelink

An MP Birla group company, Vindhya Telelink (VTL) posted a turnover of Rs

368.0 crore, mainly due to a 10 percent volume growth in the sale of JFTC and

Rs. 36.7 crore from the sale of OFC. This shows a growth of 27 percent as

compared to last year’s Rs 286.4 crore. Surprisingly, after a couple of years

of stagnant realisations in the JFTC segment, the company reported a 5.1 per

cent increase in per unit realisation, which inched from Rs. 699 per CKM in FY

2000 to Rs. 734 per CKM.

While the operating profit margin was under pressure at 21 percent as against

23.4 per cent in FY 2000 (because of higher input costs), PAT was up by 4 per

cent at Rs. 30.3 crore. The company generated a cash profit of Rs. 39 crore

during the last fiscal.

In the course of the last fiscal, the company forayed into Optical Fiber

Cable (OFC) with a firm commitment from Arihant Optics and is moving into optic

fiber (OF) manufacturing. The company also floated a subsidiary (Optic Fiber

Goa) along with Universal Cables and Birla Ericsson and with the technology from

Ericsson Network Technologies, Sweden, to meet part of its requirements for

optic fiber (OF). Vindhya Telelinks will have a 60 per cent stake in this

subsidiary. The production of OF is likely to commence in the first quarter of

2002. This backward integration is expected to reduce the company’s dependence

on outsourced fiber and consequently improve profitability margins. Being in

Goa, the company will also enjoy tax benefits.