White Diamond

Diamond Power Infra is engaged in manufacturing of power cables and transmission towers. The company had had a good Q2 but Q3 was a damp squib. It ended Q3FY15 with a net loss at Rs.30 crore compared to profit of Rs.22 crore in previous Q3 and profit of Rs.40 crore in preceding Q2. All its segments showed downward pressure - power cables, Towers, Conductors, Transformers and Power Infrastructure. Power cables sector in fact showed a loss.

The loss this quarter was totally unexpected and there were various circumstances which pushed the company into the red. First and foremost was the increase in price of raw material – aluminium and it rose by Rs.18/kg in Q3 alone. This pushed up the cost of production and this in itself led the company into the red as realization from existing orders did not keep up with the costs. This apart, the company’s premises saw huge floods and this led to production loss. There was loss of assets but the company has insurance thus hopes to recover. The company has undertaken expansions; Phase I went on stream in Feb’14. Phase II and Phase II which were to go on stream in Dec’14 and June’15 respectively. This is expected to get delayed due to delay in land acquisition and floods. The company has clarified that this delay is not expected to impact the performance as Phase I commenced commercial production before schedule.