Sujana Group Has Excellent Reputation, but the Shares Are Not Doing Well

Mobile Towers Are Not Doing Well

Mobile Towers Are Not Doing Well
Mobile Towers Are Not Doing Well | Source

Sujana Group Has Excellent Reputation, but the Shares Are Not Doing Well


Hybrid Power Plant

The Hyderabad-based Sujana group is in expansion and development mode. A Sujana group company Sujana Energy is negotiating with private equity players to garner $100 million. The funds will be used by the company for its hybrid power generation. The company will be establishing units that harness thermal power, solar energy and bio fuel to produce 400 MW, enough to provide lighting to around 100000 houses. Livestock manure and gas produced from local agricultural waste will assist propelling steam turbines at the facility. The hybrid technology mixes two renewable sources of energy which are found abundantly in India namely bio fuel and solar power. Hari Kiran Chereddi is the Managing Director of Sujana Energy. Y.S. Chowdary is the Chairman of Sujana group. He is also a Member of Parliament and very powerful & influential person.

Collaboration with Columbia Law Scholl

Sujana group has granted $485000 to the Centre for Climate Change Law at Columbia Law School which will become a part of US investment in clean energy projects in India. The projects will facilitate access of US equipment producers as India is targeting to increase its power capacity by 80% to meet its increased power needs by the year 2030. The project will also facilitate US banks and investors to invest in clean energy projects in India. Already Overseas Private Investment Corporation and US Export Import Bank have agreed to establish $250 million facility each devoted specially for renewable energy projects.

Trying To Rope In Strategic Partner

Another group company Sujana Towers is trying to sell a part of its stake to a possible strategic partner. Read the link for complete details. Read also another link for knowing details about another Sujana group company Sujana Universal. In 1986, Y S Chowdary started his business by establishing a ceiling fans manufacturing unit in Hyderabad. In those days, ceiling fans used to be manufactured in India only from Calcutta. He took over Vijay Appliances which was manufacturing fans, irons and water heaters. Chowdary named his company Sujana after his parents name Susila and Janardhan. Sujana group has four companies now and three of them are listed.

Acquisition of Gem Cables

The turnover of Sujana group is around Rs.6000 crore. But for the recession in steel industry, the turnover would have been more. Sujana Domestic Appliances (now called Sujana Universal) went public in 1989 with a small issue of Rs.70 lakhs. For the 18 months period October 2009 to March 2011, Sujana Universal posted a turnover of Rs.3880 crore. Sujana Metal Products Ltd is the flagship of the Sujana group. It went public in 1992 and has an annual turnover of Rs.2830 crore. Later on Sujana group added one more company Sujana Towers Ltd. It acquired Gem Cables. The fourth company of the Sujana group came in 2009 as Sujana Energy and is unlisted.

Refurbishing Thermal Power Plants

Refurbishing Thermal Power Plants
Refurbishing Thermal Power Plants | Source

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Sujana Group Has Excellent Reputation, but the Shares Are Not Doing Well


Low Attrition and High Quality HRD

Sujana group has 6000 employees. This means each employee produces a turnover of Rs.1 crore per annum. Sujana group has facilities abroad in countries like Singapore, USA, Mauritius, Hong Kong and UAE. Sujana group employs professionals to run the company and has distinguished between management and ownership. HRD is given top importance in Sujana group and there is low attrition. Sujana Metal Products pioneered the use of ready-to-use ‘smart steel’ which is pre-cut and bent according to the requirements of individual clients. The concept is similar to pre-mixed concrete. Wastage is also reduced to a great extent. It has important clients like IVRCL, L&T, DLF and state electricity boards. The company manufactures a million tonnes per annum of steel from its eight production facilities. The company’s Vizagapatnam plant which has a capacity of 120000 tonnes per annum of steel also serves as the conversion plant for Steel Authority of India, India’s largest steel plant. Sujana group plans to venture into backward integration into iron ore mines to hedge against increase in prices of iron ore, the raw material.

Mobile Towers Are Not Doing Well

Sujana Towers has a big capacity of 100000 mobile and power towers. Gem Cables has the capacity to make 360000 tonnes of conductors and 10000 km of cables. Sujana group is planning to reach a turnover of Rs.5000 crore for Sujana Towers in four years time. The current turnover is around Rs.1200 crore. At present telecom towers are not doing well inspite of the fact that 3G has been introduced in the industry. But power transmission is doing well and is poised to expand in the coming years. Sujana group is also taking up EPC (Engineering, Procurement and Construction) projects in the Middle East like Kuwait.

Refurbishing Thermal Power Plants

Sujana group is also in the business of refurbishing existing thermal power plants. Through this, plant efficiency is improved by 50-60 per cent and carbon emission is reduced. The company has set up processes to recycle SF6 gases (sulphur hexa fluoride). This will get the company’s customers obtain carbon credits. Sujana Energy is India’s only company manufacturing solar thermal parabolic troughs. It has a strategic cooperation agreement with Nichia Chemical Corporation of Japan, which is world’s largest manufacturer of LED.

Sujana Group Shares Enjoy No Market Fancy

One customer NSL SEZ is using Sujana Energy’s LED bulbs to light up 62000 sq km of area. The LED bulbs are very aesthetic and of good quality. Sujana group is also focusing on railway engineering in metro rail projects. Sujana group has very good future because of its stress on quality and customer service. But one thing I do not understand is why the shares of its companies like Sujana Universal and Sujana Towers are trading at a very low price. Why has the stock market not favoured these companies? Why is there no market fancy for these companies? There should be some valid reason for this. I do not know the answer for these questions. Maybe, huge debt could be a reason. Investors willing to acquire the shares of companies in Sujana group should check up these facts with informed people and then buy. Otherwise they may be burning not only their fingers, but their hands also.

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