Ashish Soparkar, MD, Meghmani Organics , in an interview to CNBC-TV18 talked about business outlook for his company going forward. The stock was a star performer in 2014.
The company has plans to set up a new caustic potash plant at Dahej, Gujarat Industrial Development Corporation and the plant would be funded via internal accruals, said Soparkar in an interview to CNBC-TV18. In FY17-18 the company aims to touch Rs 2000 crore sales between three divisions - pigment division, agro division and basic chemicals, he added.
Talking about the company's overall performance for FY15, he says the total revenues would be around Rs 1400 crore and EBITDA margins would be around 16-17%.
The company currently is sitting on a land bank of 2.7 million square feet at Sanand but has not plans of monetising it.
Meghmani Organics Limited is a leading manufacturer of pigment and pesticide products in the country.
Below is the transcript of Ashish Soparkar's interview with CNBC-TV18's Reema Tendulkar and Ekta Batra.
Reema: You have plans to set up a caustic potash plant at Dahej and you have indicated that the cost of this project will be Rs 65 crore. Can you tell us how the company plans to fund this?
A: Company has enough internal resources and the company will fund the Rs 65 crore project from its own internal resources.
Ekta: Can you just tell us what the financials from this plant would be. For example, one, when would it come on stream and when would it start contributing to your P&L?
A: The plant will come on stream from October 1, 2015. The topline will be around Rs 120 crore and bottomline can be expected between Rs 15-25 crore.
Reema: This would be how much you can generate in the whole year of operation. So that perhaps would be FY17. Considering that the plant will start on October 1, you still have half of FY16 where the plant could contribute. Can we assume half of this Rs 130 crore or Rs 120 crore or do you think the ramp up will take time?
A: October 1 the production will start and once we have started, it will be started in full strength and we believe that maybe one or two months will take some ramping up time is required but from January 1, 2016 the project will be 100 percent on stream.
Ekta: Can you give us a sense on why exactly are you undertaking this capital expenditure (capex), what is the opportunity in caustic potash at this point in time for Meghmani Organics and what is the capacity utilisation that you would expect?
A: We are manufacturing caustic soda around 500 tonnes per day and the same set of customers, distributors and industries use caustic potash. Even though caustic potash consumption is lesser than caustic soda but as we are manufacturing 500 tonnes of caustic soda everyday we believe that around 50-60 tonnes of caustic potash everyday will not be difficult to sell in our existing set of customers.
We won't have any extra overheads, we will not have any extra manpower for this, we don't need any land, and we don't need any major additional building. It will be adjusted in the same site with the same workforce, with the same marketing theme and going to the same customers this caustic potash production.
Ekta: In a way you are saying that it will have some economies of scale for you and some backward integration for the company with regards to this?
A: It is parallel project but we will be saving a lot on investment. It cannot be a standalone project as the profitability will be reduced if it is a standalone project. However, as we are utilising our land and other manpower related resources, we are sharing with it caustic soda. So caustic potash will be a very good profit center.
Reema: Overall for the entity in FY17 once you have the full benefit of this caustic soda what could be the combined margins for Meghmani Organics?
A: Meghmani Organics we believe in 2017-2018 should touch Rs 2000 crore sales between three divisions; between pigment division, agro division and basic chemicals. We should touch Rs 2000 crore.
Reema: By FY17 or FY18?
A: FY17-FY18.
Ekta: I wanted to just get a sense on your debt figures as well. We do understand all the way back in August you had mentioned that you had plans of pairing off debt by around Rs 100 crore by October 2015. Where exactly is your entire debt figure at this point in time, how much cash do you have on your books?
A: Last year we started with a debt of Rs 755 crore. Currently, at the end of this year it will be reduced to around Rs 680 crore. In next three years, including this year we propose to reduce it further by Rs 250-300 crore.
Ekta: How would you do that?
A: By internal resources, by internal profit generation we will be able to reduce it.
Reema: Does the company have any non core assets which could be utilised to reduce your debt if required?
A: I don't think so. We don't have a non-core asset as of now. However, we have a lot of land at our Chharodi plant but right now we don't intend to sell or liquidate that asset.
Ekta: When you say you have a lot of land, what do you mean by that, how much is it and how much is it worth and why don't you intend to sell it?
A: We have around 2.7 million square feet land at the prime location and just next to Nano factory in Sanand. This area is appreciating so fast that we will like to keep it for better utilisation in coming years.
Reema: Are you on track to meet your guidance for FY15?
A: We believe that we will touch around Rs 1400 crore turnover this year with around 16-17 percent EBITDA.
Anda sedang membaca artikel tentang
Will fund Dahej plant via internal accruals: Meghmani
Dengan url
http://kebugaranhidup.blogspot.com/2015/01/will-fund-dahej-plant-via-internal.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Will fund Dahej plant via internal accruals: Meghmani
namun jangan lupa untuk meletakkan link
Will fund Dahej plant via internal accruals: Meghmani
sebagai sumbernya
0 komentar:
Posting Komentar