Himadri Chem eyes capacity expansion, CAGR of 30% ahead

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Himadri Chem eyes capacity expansion, CAGR of 30% ahead

Anurag Choudhary, CEO of Himadri Chemicals & Industries, in an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, spoke about the recent happenings in his company and the road ahead.

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Anurag Choudhary, CEO of Himadri Chemicals & Industries , in an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, spoke about the recent happenings in his company and the road ahead.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: We understand that in the coming quarters, your plant will be commencing production so could you tell us where the capacity would stand at the end of this and how would it increase you revenues?

A: During the second quarter, we will be commencing three power projects. We are going to start production in our China unit. We are going to commence the capacity of 50,000 metric tonne of coal tar pitch and along with that we are going to expand the capacity of our carbon black in India, which is going to commence production from 50,000 tonne to 90,000 tonne.

The power plant is going to commission so the power capacity will increase from 12 mw to 20 mw. In addition to that, the SMS plant which we are setting up at our existing site with a capacity of 40,000 metric tonne it will also commence in the Q2 of the current year.

Q: It seems like you have a lot of backward integration plan, what would this mean for your margin going forward because if you look at your Q4 numbers there was quite a slip in your margins even in terms of FY11 you did around 28% vis-à-vis 38%. What is your expectation for FY12?

A: On a year-to-year basis, we don't give any guidance but on a broader picture if you look at the last year, we had a higher margin because we were carrying inventory at a lower cost but during the last year we were having inventory at the market values so the margins were in 25-30 bracket and we expect this to be the right way to look at the profit margin, EBITDA margins of the company.

Q: What is the plan with cash on books, how much would remain post this capex. We understand you have around 400 crore?

A: Yes, there are other expansion plans also with the companies undergoing other than this so looking forward in the next 18 months we are going to spend our coal tar distillation capacity also significantly so with that we are going to expect significant cash on the books.

Q: Would you deploy this full 400 crore possibly in FY12-FY13?

A: Yes, that's right.

Q: Could you tell us what the total revenue growth for the company would look like in FY12?

A: We don't give year to year guidance but for the next three years we are looking at 30% CAGR on topline and bottomline.

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