Kamdhenu Ispat eyes Rs 385-390cr revenue in FY11

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Kamdhenu Ispat eyes Rs 385-390cr revenue in FY11

Satish Kumar Agarwal, MD, Kamdhenu Ispat, in an interview with CNBC-TV18's Latha Venkatesh and Gautam Broker, spoke about the recent happenings in the company and the plan going forward.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Kamdhenu Ispat See previous management interviews See what other Experts & Brokerages are saying about Kamdhenu Ispat

Media reports have been emerging that Kamdhenu Ispat is planning to hive-off its paints' business and launch its FPO in FY11-FY12.

However, the company informed BSE, that such news is without substance. It does not have any plans to hive-off of its paints' division in the current financial year nor will it launch any FPO in the near future.

Satish Kumar Agarwal, MD of the company, told CNBC-TV18's Latha Venkatesh and Gautam Broker about the company's revenue expectations.

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

Q: You have made some clarifications publicly as well. Do you have plans of hiving of any division at all?

A: A discussion regarding the results of the company was mistaken by a concerned person. As on date, the board has not planned or considered hiving off the paint division.

Q: In Q3, your revenues were down by 8% with steel down by almost 23%. Yet, your margins still improved by about 3%. What was the reason for that?

A: The paint sales have increased by 57% during the current quarter. Though the steel numbers are down by 23%, in the last quarter, we had a loss in the paint division. This year, the paint division is doing well. The sales have improved by 57%. This is the reason that our numbers are better than the last year.

Q: Since your paint division is profitable, would it not make sense to hive-off the entity and create it a new entity. You may not have any plan to hive-off this division in the current fiscal, but is there any plan going forward?

A: No. Right now, we don't have any plan on the board agenda. Moreover, we are adding more units in the paint division. Presently, we have a plant at Rajasthan with a capacity of 45 million litres of paint for the year. We will be adding one more unit in Raipur, to cater to southern India's requirement.

The company is doing well and its sales are increasing. In 2007-2008, the number was less than Rs 50 crore and the next year, the numbers were Rs 96 crore. This year, we hope to get revenue of more than Rs 150 crore from the paint division.

Q: What would your overall revenues touch this year?

A: This year, our revenue can cross Rs 385-390 crore for the company.

Q: Don't you have some plans to increase your capacity to 200,000 tonne in the steel space?

A: The company is doing well on the franchise network and its unique model for the steel sector. Kamdhenu is roping 38 units right now. Through the franchise route, we are having a huge capacity of about 1.5 million tonne.

During the next two-three years, we hope more units to join the Kamdhenu group. In future, we will be able to achieve a target of 2 million tonne of TMT bars through the franchise units.

Q: What are your FY12 revenue expectation?

A: It is too early to say, but we expect 10-15% growth.