Current order book at Rs 4,500cr, says Jindal Saw

8451 Investors following Jindal Saw. Share this News with them.

0

Like this story, share it with millions of investors on M3

Current order book at Rs 4,500cr, says Jindal Saw

In an interview to CNBC-TV18, Indresh Batra, managing director of Jindal Saw spoke about the latest happenings in his company and the road ahead.

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Jindal Saw See previous management interviews See what other Experts & Brokerages are saying about Jindal Saw Jindal Saw BSE | NSE 30/05/12 Are Mutual Funds betting on Jindal Saw?

In an interview to CNBC-TV18, Indresh Batra, managing director of Jindal Saw spoke about the latest happenings in his company and the road ahead.

Below is an edited transcript of the interview. Also watch the accompanying video.

Q: The foreign exchange exposure is the big thing the moment. You have imports largely supported by buyer's credit. Also large part of import is hedged by exports and you have external commercial borrowing (ECB). Tell us exactly how much of your imports are more than your exports, what is the exposure to foreign currency?

A: Nearly 70% of our revenue comes out of exports which are primarily in US denominations and we buy roughly 50% of what we export through imports so, there is a natural hedge available.

Any sharp volatility in currency does not turn out to be positive or negative. At this moment in terms of our balance sheet exposure we have about USD 70 million ECB, where there was mark to market loss of about Rs 45 crore which we showed in last quarter. There was no cash loss as it was raised this year itself.

In terms of our profit on what we export and import, a large part of it is hedged. We often hedge what is not hedged by the raw material and those ranges have definitely been crossed. No one expected rupee to depreciate, at least we for it to come at 55.

Q: Is this 70 million ECBs hedged, when does it come for payment? You are seeing this kind of depreciation; can one assume your Q4 could be a lot better?

A: We raised this money in July 2011, so it's a door-to-door facility of about six years and the repayments would come in the year 2016-2018.

Q: I am asking Q4 with respect to depreciation. Your exports are way above your imports, would that mean that you would make more money?

A: I am not aware of the exact fact but if are hedged on 50, we will not able to take the incremental benefit to 54-55. But there is definitely a trend which helps you if you are an exporter and who is exporting in US dollar denomination.

Q: Tell us what is the total debt on the books combining ECB and what you have raised domestically and which is the next one which comes for repayment?

A: We have a total long-term debt of about Rs 700 crore against a networth of about Rs 4500 crore, so we are not leveraged. We also have about Rs 1500 crore of buyer's credit which is primarily into the inventory and receivables. There is nothing which comes for repayment in next 18-24 months.

Q: Your EBITDA margins took a beating in this Q2, how will they pan out in the second half?

A: There is a sharp movement in terms of inputs for us in the quarters preceding the last quarter which got reflected in Q2. We also executed a low price domestic order which was substantial order for us. We expect that the EBITDA margin should improve for us which were the guidance post results, and we expect this to be better than the current quarter. But this is not a gung-ho business environment, one is sobered by the macro economical data.

Q: Last time you had indicated that you do expect an improvement in the order book because in Q2 it had declined sequentially - is that taking place?

A: About a fortnight ago we had announced that our order book is little over Rs 1,000 crore and our current order book is around Rs 4,500 crore which covers our two-and-half quarters' projected revenue, which is okay for us.