M Radhakrishnan, Co-founder & MD, Autoline Industries said, they have taken few steps like reduction of debt, optimisation of their facilities and innovation, cost cutting, monetization of patents, to improve their bottomline.
He further told CNBC-TV18 that loss seen in standalone numbers both in Q3 and Q4 was basically due to slow down in the overall auto industry but added that on a consolidated level they saw a growth of 7.5 percent on the topline.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: Could you explain the loss that we have seen in your standalone numbers. We had a loss even in Q3 as well. When could you expect a turnaround in your standalone performance?
A: The standalone performance has been little down because of overall auto industry going down. Our earnings before interest, taxes, depreciation, and amortization (EBITDA) level has come down by 2 percent due to certain receipts, which had to come, they didn’t come and we are not expecting.
The finance charges went up by almost 20 percent from Rs 30 to Rs 37 crore, which also affected the standalone.
However, on a consolidated level we have a growth of 7.5 percent on the top-line and even on quarter on quarter, corresponding quarter we have 25 percent growth on consolidated basis.
Q: Your point is taken on quarter-on-quarter net profit growth but year-on-year (Y-o-Y) it is down from Rs 16 crore to Rs 1 crore. By when do you expect to go back to the kind of profitability that you had last year?
A: We have taken some steps to improve the bottom-line. One will be reduction of debt because our interest finance charges are high because of certain investments made which have not given expected returns.
Two, is optimisation of production facilities. We have 11 manufacturing facilities - we grew from about 11 lakhs, about 15-16 years back to Rs 800 crore. One will be mega project location, where we can get return of whatever sales tax or value added tax (VAT) we pay. We have entitlement of Rs 77 crore and in the next three years we have been able to use only Rs 27 crore. So, the balance Rs 50 crore we have to use in the next three years.
Third, is innovation, cutting cost through value engineering and also productionisation or monetization of some patents.