Revathi Equipment

Coimbatore-based mining equipment manufacturer, Revathi Equipment Ltd, is looking to diversify its revenue base. The company, which has so far been dependent on Coal India for business, is trying to tap other clients, too.

It is in the process of forging an international tie-up for manufacture and supply of exploratory drills. In the works is a five-year international marketing and distribution tie-up with Bucyrus that could give it an order for seven machines.

Meanwhile, Revathi has ventured into the concrete equipment business, including batching plants, transit mixers and concrete pumps, and has picked up substantial stakes in companies like Monarch Catalysts and Potential Service Consultants.

Abhishek Dalmia, chairman, Revathi Equipments told DNA Money, “We expect the division to post revenues of Rs 30 crore by FY08 and Rs 150 crore by FY10, from a mere Rs 2 crore in FY07.”

The concrete equipment market is currently worth around Rs 800 crore, which the company expects to expand to Rs 1,500 crore by FY10.

The construction equipment business can outgrow the mining equipment business in times to come, said Dalmia, adding, the former is a high-volume, low-margin play, whereas the latter involved low-volume but relatively better margin.

“The whole idea for all these measures is to reduce dependency on a single business and a single client,” said Dalmia.

After acquiring a 40% stake in Bangalore-based PSC, the management has drawn up a bigger plan for Revathi. It is PSC’s operations to other metros, including Mumbai, Pune and Chennai and bringing in a dedicated chief operations officer to manage and grow the business.

In FY07, the domestic drills business contributed Rs 70 crore to Revathi’s revenue, while exports stood at Rs 8 crore.

Revathi was established in 1977 as a joint venture between Drill Pvt Ltd and Chicago Pneumatic Tools Co Ltd. The current promoters, Utkal Investments, bought out a 40% stake of Atlas Copco in 2002, thereby increasing their stake to 60% in Revathi Equipment.

Via DNA Money