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Nucleus eyes growth in dish antenna market as DTH players increase local sourcing
MUMBAI: Chennai-based dish antenna manufacturer for direct to home (DTH) operators Nucleus Satellite Communications is eyeing big growth from the Indian market as DTH operators have started sourcing dish antennas locally.
Earlier, DTH operators used to source dish antennas from outside India mainly from the Chinese market.
Nucleus Satellite Communications MD V Raman told TelevisionPost.com that the company has an order book of 2.5 million dish antennas for the remainder part of FY18 from DTH players like Dish TV, Videocon d2h and Tata Sky.
The company had recently shifted its manufacturing base from Kanchipuram, Tamil Nadu, to Sri City, Andhra Pradesh. The manufacturing capacity of the new facility is 4 million dish antennas annually.
Nucleus counts Tata Sky, Videocon d2h, Dish TV, Airtel Digital TV and Sun Direct among its clients.
“We have been supplying antennas to almost all the DTH players. Earlier, DTH players used to import dish antennas from China. Now, most of the players are turning to India,” Raman told TelevisionPost.com.
Raman said that India is the primary market for the company. It also provides components to Israeli telco MTI.
Besides local sourcing by DTH operators, Raman is also betting on cable TV digitisation in Tamil Nadu to lift the business up.
In FY17, the company had raised Rs 36-37 crore in Capex. It had raised the amount through a mix of debt and equity. Raman said that a part of the Capex was raised by disposing of a land property.
“We were able to raise Rs 36-37 crore for Capex through a mix of debt and equity. The entire Capex has been almost deployed as we had a Greenfield project. This year, we don’t have many major Capex plan,” Raman said.
In June 2016, credit rating firm Crisil had downgraded the company’s ratings stating that the company’s financial risk profile will deteriorate over the medium term primarily driven by large debt-funded Capex.
It had also stated that the offtake risk for the new capacity is expected to remain high, although the company is in discussion with several customers for sales.
Additionally, with the increase in competition and inability to pass on raw material price volatility to its customers, the company has been witnessing a steady decline in operating margins and this trend is expected to continue over the medium term, Crisil had stated.
For 2014-15, the company’s profit after tax (PAT) was Rs 1.03 crore on sales of Rs 69.82 crore, against PAT of Rs 16 lakh on sales of Rs 56.68 crore for 2013-14. For 2015-16, the sales are estimated at Rs 59.36 crore.