Sembcorp’s India power plant set to break even this year

It should contribute to company bottomline from 2016 onwards.

Sembcorp's India power plant is likely to break even this year, according to a report by DBS.

Considering that it incurred startup losses of $21m in the past two quarters, it comes as pleasant news that the plant should contribute to the company’s bottomline from 2016 onwards with better economies of scale after its second unit ramp-up. Further, this would mitigate earnings decline from Singapore power plants.

Moreover, DBS posits that Sembcorp’s foray into other emerging markets like Bangladesh and Myanmar bolsters the longer-term growth prospects of its utilities segment. As the countries grapple with severe power shortages, Sembcorp is given a foothold to potentially develop other utilities and infrastructure businesses such as water and urban development.