FY13 to be far better than FY12: Vardhman Polytex

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FY13 to be far better than FY12: Vardhman Polytex

In an interview to CNBC-TV18, Adish Oswal, executive director of Vardhman Polytex says, this has been tsunami year for most of the textile companies in the country. “The next year should be far better than the current year,” he adds.

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In an interview to CNBC-TV18, Adish Oswal, executive director of Vardhman Polytex   says, this has been tsunami year for most of the textile companies in the country. "We hope that from the Q4 of the current year we should see a turnaround. There should be major change happening. The next year should be far better than the current year," he adds.

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: We understand that your expansion in Himachal Pradesh is about 65% complete. When are you expecting full completion? What it would contribute to your top-line?

A: We would be starting the 25,000 spindles on a full capacity basis from March 12 onwards. We expect to complete the project in four-six months time from now.

Q: What it would add to your top-line?

A: In the next financial, we should be adding about Rs 120 to 125 crore. But on a full operation basis, we are adding about Rs 150 crore plus.

Q: When do you expect to things turn around for Vardhman Polytex? When can we expect improvement?

A: As a company, since last 31 years, this has been tsunami year for most of the textile companies in the country. So, it is the first year where the company has made an EBITDA loss. We have never done that before in our track record.

We hope that from the Q4 of the current year we should see a turnaround. There should be major change happening. The next year should be far better than the current year.

Q: In Q4, will there be a turnaround at the EBITDA level or we can expect the turn around at the profitability level? How you will end FY12 at?

A: Q4 should be at the cash profit for sure, not only EBITDA. Because the first half of year has been quite steep losses because of cotton fibre, I think the year should be negative. But going forward it should be positive.

Q: What about your debt? We understand that you have reduced some amount already. What amount would you be looking at reducing in FY12?

A: Total debt, in FY12, in the current year, we have already paid about Rs 25 crore. We expect to retire another Rs 15 crore or so till 31 st March. As a company we are very clear that in next three year we are going to drastically reduce our long-term debt by almost 70%. We don't want to be carrying more debt.

Q: Does this debt include any outstanding FCCBs and when are they due?

A: Our FCCB is due in 2013, even outstanding of USD 8.5 million, so still some time to go.

Q: Could you tell us how the price of cotton has been for you?

A: Because cotton is under open general license (OGL), it's still going quite strong. We still feel that yarn needs to catch up more hopefully.