Aarti Industries targets 25% bottomline growth next year

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Aarti Industries targets 25% bottomline growth next year

In an interview with CNBC-TV18, Rajendra Gogri, VC and MD of Aarti Industries spoke about the expansion plans of the company.

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In an interview with CNBC-TV18, Rajendra Gogri, VC and MD of Aarti Industries spoke about the capacity expansion plans of the company.

The company has expanded and upgraded the capacity of it's Jhagadia plant to 1,500 tonnes per month.

"We have also added nitrotoluenes which is another basic chemical range and that is expected to be another growth driver," he added.

The company is expecting a topline growth of about 50-70% and bottomline 25% in the next year.

Below is the verbatim transcript of Gogri's interview with Ekta Batra and Sonia Shenoy of CNBC-TV18. Also watch the accompanying video.

Q: You have around Rs 40-50 crore in FY12 for expansion and you have already spent around Rs 60 odd crore. Could you just take us through this entire capacity expansion, when do you expect it to come on screen and what sort of demand are you catering to?

A: This year we have expanded and upgraded our capacity in Jhagadia plant we have expanded it to 1,500 tonnes per month and there is sizeable demand for that product. We are expecting to reach that capacity in FY12. That is one of the major expansion. We have also added nitrotoluenes which is another basic chemical range and that is expected to be another growth driver.

Q: How exactly are you funding this entire capacity expansion because is it any chance by debt?

A: We have got substantial amount of our own cashflow. Partially it is debt and partially from our internal cash flow.

Q: What about your overall business performance because even in FY10 and for a major part of FY11 you have been showing a degrowth in terms of profits, margins have not been doing too well. Will this capacity expansion help in anyway to improve or meant the performance of the business or do you think you will still continue to show degrowth in profits?

A: This year we commissioned new technology and that's why we had a bit of degrowth. We will be more or less maintaining last year's bottom line or may be little bit less.

Q: When will you start to show growth then?

A: We are expecting a topline growth of about 50-70% and bottomline 25% in the next year. We are also expanding our fertilizer plant. That will increase our agrochemical turnover. We are expecting about 40% growth there.