Small caps are becoming the focus these days and Batliboi is one such stock, having come out with a good set of numbers and working across three business segments in the engineering space.

Nirmal Bhogilal, CMD at Batliboi says that the size of  its acquired Canadian company is about Rs 50 crore in turnover, for FY06.He adds that the acquisition is in the space of machine tools. They make specialized machines in a niche market and have a high market share in the North American market.

Excerpts from CNBC - TV18’s exclusive interview with Nirmal Bhogilal:

Q: Could you walk us through the Canadian acquisition that you made of Rs 22 crore and what sort of sales does the company has and by when will you integrate it with your company?

A: The acquisition is already complete. The size of the company is about Rs 50 crore in turnover for FY06 and they had a profit after tax of about Rs 4 crore. The acquisition is in the space of machine tools and it is the first acquisition made by an Indian company in the machine tools space. They make specialized machines in a niche market and they have a high market share in the North American market.

Q: Could you walk us through specifically for this particular financial year? Do you have any capital raising plans for any organic development now that this acquisition has been completed? 

A: For organic growth, we really don't require any funding because our internal accruals are good enough for that. We have a capex programme of about Rs 10 crore which we should be able to fund through internal resources.

Though at the same time the promoters holding in the company is 81% and as per the Sebi guidelines; we would need to dilute it to bring it down to 75% by end of March next year. In case the Sebi guidelines remain the same as they are today, then we would have to do some dilution. Otherwise if there is any further growth inorganically, we will do it through debt.

Q: How many more acquisitions are you planning or will this be all for FY08 and in the light of the integration that you are making with your acquisition, what will be your FY08 target in terms of sales in bottomline?

A: We don't really give any target of sales in bottomline. But I can just say that there will be decent growth, especially with the way the economy is moving.

Q: Any more acquisitions on the anvil?

A: We are always looking at what we can do because we want global footprints in our niche businesses and at the moment, there is nothing in the pipeline. But we are always on the lookout.