ISMT eyes standalone margin at 18.5-19% for next year

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

Q: Is the power project coming up on schedule? Has the power production already begun or likely to begin soon?

A: Yes. The power project should be on stream by end of this quarter. All the equipments are at the site and we are at the final stages of erection. We are expecting the project to be on stream. The benefits will be available from April onwards. We expect a benefit of about Rs 35 crores to Rs 40 crores per annum.

Q: You have an advantage of in-house power coming in which will impact you in FY11. But, there is also an increase in competition for this space. What kinds of margins you will be able to keep in the forth quarter and in FY12?

A: We are looking to sustain the present margins which would be in the region of about 18.5. We will have an improvement from power side which we have not counted those margins. They will be additional margins. On the stand-alone, the margins should be about 18.5-19%. It would add a lot to the volumes during this space. From this year, volumes will grow up by about 30% and the next year, they will grow by 25%.

Q: What kind of revenues are you expecting from your Swedish acquisition? By when do you expect it to break even?

A: We had a very bad last year. Current year, we have already touched a turnover of about Rs 90 crores. We are targeting about Rs 150 crores in the current year. Now, we expect to sustain our growth there. We are rationalizing a lot so that we can reduce the cost. We have already reduced the manpower cost. We are trying to do some processes and front ending with the Indian cost rather than the Swedish cost. We are looking forward to examine and reduce the cost. It is already breaking even and should contribute the bottom-line.

Q: What kind of revenue growth are you expecting in FY11 and in FY12?

A: We should have a 30% growth in FY11. With a turnover of Rs 1,600 crores for the current year, we are targeting more than Rs 2,000 crores next year and Rs 2000-2100 crores turnover for the coming year.