Moser Baer: Solar the saviour

If all goes by the plan, in five years the current listed entity will play second fiddle to the power business, which is mostly owned by the Puri family. The Rs 2,260 crore Moser Baer India has two main business lines: digital-storage media (CD, DVDs and Blu-Ray discs) and solar photovoltaic ( PV) cells.

The digital-storage business is in slow decline, which will, sooner rather than later, accelerate into redundancy. The company's CD sales are falling 5-8% a year, while DVD sales are flat. Although Blu-Ray is on the upswing, it will trace the trajectory of CDs and DVDs, as Internet downloads take over.

The company has diversified into new areas like pen drives, consumer electronics and films on CD/DVD, but these areas have hugh technology risk. "Clearly, the growth driver will be PV cells," says Ratul Puri, executive director, Moser Baer India. In 2010-11, the company expects PV cells to account for one-third of its projected revenues of $700 million.

The global industry projections explain why. The $60 billion PV market is expected to increase to $300 billion by 2020. During the same period, the market for digital-storage media is expected to crawl from $3 billion to just $5 billion.

So, the power business is where the growth is. Although shareholders of Moser Baer India will not directly be a part of it, they are not being short-changed, says Venkat Ramaswamy, executive director, Edelweiss.

"The listed entity has not put in any money in the power business," he says. It might still benefit indirectly, as the solar-power business will buy PV cells from Moser Baer India. Solar is the saviour for the listed company.