Hi Rohit – Agree that this will still be capex. But the point i am making is that it is not maintenance capex. On another note, this capex was not mandatory. An option available to Ambika mills was to go for a dedicated feeder and enter into a PPA with another wind power generator and simply buy wind power. Thus capex was not necessary.
This capex allowed them to improve their operating margins in long term and need to be viewed accordingly. Historical rate of increase in electricity tariff in India is 5.5% (CEA data). Few years down the line the wind mills will help in significant power reduction costs.
On a side note – As per an analysis that I have done on some listed companies in textile space, OPM for textile companies that have their captive wind projects is much higher for textile companies that do not have a captive renewable energy source. Companies on left have captive wind mills whereas companies in right do not (except RSWM which has commissioned a 20 MW wind mill an year ago. However even this 20 MW is equivalent to 4 MW of thermal power project. their existing thermal power project is of 50 MW. I am assuming therefore the impact is not much in this case even after having a windmill
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