Also read: Sintex Industries Q3 PAT seen down 8% at Rs 76 cr
The company's monolithic segment has been a challenge area for many quarters. However, this quarter it grew higher than market expectations. Kanojia is very positive on monolithic segment and expects revenues of around Rs 1700cr from it.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Could you tell us, what contributed to a bit of margin recovery across all your key segments in the quarter gone by? What changed in terms of even the macro picture for your company?
A: There is a volume growth across all the segments. I think in all the segments for example pre-fab have grown by 25 percent and monolithic by 40 percent. Then custom moulding overall including the overseas has grown by about 15 percent.
So, when volumes grow that has an impact positively on the margins. When we compare our Q3 and even Q4, going forward, they will be compared with a weaker second half (H2) of the previous year. So, this will always show a much stronger half in this financial year as compared to the previous year. That's why one sees that there is an impact on the margins as there is a growth of the volumes.
Q: Monolithic segment has been a challenge area for your company for many quarters now. However, this quarter, this segment actually bucked the trend, growing higher than market expectations. Could you highlight what went right and whether it will continue?
A: Monolithic segment as far as Sintex is concerned is a segment which we consider very bullish going long-term. It is a very big opportunity talking about economical weaker section housing. A rough estimate says about five crore housing requirement for weaker section.
This is not going to happen in one year, but over a period of time. It means that government support has to come because this is not a segment where real estate developer will like to come and participate. So obviously segment will be driven largely by the government.
Though, there has been some kind of stickiness as far as government rollout was concerned, but going forward country cannot grow or see a good standard of living unless we have housing. That is the basic amenity being provided to the people, as the water sanitation, roads, infrastructure and other things.
We are always very positive and bullish about this particular segment. We have been actually curtailing some kind of execution on this particular segment. The debtors were becoming sticky and we did not want our cash to be occupied there.
We were a little prudent in terms of which particular sites to execute and which not. As far as order book is concerned it always remained to be Rs 2,400. So, at any point of time if we really want to go full blast and we think that we don't have this problem of debtors going long, we can do close to about Rs 1,600-Rs 1,700 crore annually.
So, we look forward to after this budget. For example once this budget goes over we look forward to have some kind of support coming from government. We will possibly have a much bigger growth coming from this particular segment.
Q: You mentioned about the slow-moving sites, now that's the problem that you are facing currently. What's the outlook on these? You highlighted that you choose not to go ahead with some of them where you felt debtor days could be high. What's the outlook going forward on those?
A: As far as we are concerned we are able to execute the order in a very short period of time. Something which gets constructed in a conventional manner let's say in two year's time we can do it in six-month time.
As far as customer is concerned at times he does not wants sites to be finished. For example, it could be in six months because one is not oblige to pay us in six months.
Second issue, which comes up is that because of bureaucratic delays at times people are not really keen on taking decisions when it comes to large payments. So, file keeps going up and down and decisions are referred to committee.
One can say we were facing those typical delays that can happen because of bureaucracy. However, we have been able to bring down these seven sites of last year to maximum two or three maybe there now. Thus, most of these sites have been sorted out.
Q: Where does the company see the debt-equity position stabilising? What are the debt levels which the company is working with for FY14?
A: The whole exercise which was carried out towards the FCCB redemption and we did the fund raising. It was with two primary objectives one that we accessed to the market once. Therefore equity and debt both have been considered in form of cohesive debt as well as the plain equity that promoters also participated.
Second was to improve the return-on-capital employed. This over a period of time we have seen because of large capexes and cashflows not being very positive. The returns were being impacted adversely.
So, we wanted to work towards moving, in terms of having a better capital deployment ratio. As well as the profitability has to improve. Therefore debt had to come down.
We look forward to have debt-equity in the long term maybe 0.8:1. That's the kind of approach that we are having and probably debt-earnings before interest, tax, depreciation, and amortisation (EBITDA) ratio not more than three. These are two parameters that will govern the future balance sheet and the return on capital employed which is today about 13 percent or so.
We look forward to have it improved by atleast 600 basis points (bps) by 2014, this year as well as the next financial year. So, we would be comfortable somewhere around 19-20 percent as far as return-on-capital employed is concerned.
Anda sedang membaca artikel tentang
See revenue of Rs 1700cr from monolithic business: Sintex
Dengan url
http://kebugaranhidup.blogspot.com/2013/02/see-revenue-of-rs-1700cr-from.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
See revenue of Rs 1700cr from monolithic business: Sintex
namun jangan lupa untuk meletakkan link
See revenue of Rs 1700cr from monolithic business: Sintex
sebagai sumbernya
0 komentar:
Posting Komentar