Liberty Phosphate aims for Rs 425cr plus turnover in FY12

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Realisations have been picking up off-late due to which the volume of sale of single super phosphate (SSP) has picked up. RR Dhanani, MD of Liberty Phosphate , in an interview with CNBC-TV18's Sonia Shenoy and Reema Tendulkar, spoke about the latest happenings in his company and the road ahead.

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

Q: What are the developments in terms of the fundamentals of the business? How is the revenue traction looking right now?

A: The government has given some standing with other di-ammonium phosphate (DAP) producers. We have started getting our P205 of 16% which was water soluble. Now, they have accepted a citrus soluble. So, there is 1.5% additional revenue which will be generated during the year from April onwards.

Q: How will that improve your revenue stream? In FY12, what kind of revenue growth are you expecting to see? In FY11, your sales growth was quite strong where you did about Rs 350 crore?

A: This year, we are targeting about more than Rs 425 crore turnover and about Rs 55 crore bottomline.

Q: You have seen this exponential jump in your FY11 sales because of complex fertilisers being deregulated. Can you give us an update on whether you would be looking at an increase in capacity expansion considering that you have seen such an increase in demand as well?

A: We will be doing a better capacity utilisation by setting up warehouses at district levels of each state. We will get into better marketing so that our capacities are utilised in a better position.

Q: Currently, what is your capacity work at? What sort of capacity do you currently have for Nitrogen, Phosphorus and Potassium (NPK), and SSP?

A: We have about 800,000 tonne capacity of the group. We have been utilising about 78%, but we have targeted 85% utilisation for this year.

Q: Could you give us an idea on how realisations are working for you in terms of SSP? How have they improved since the complex fertiliser deregulation?

A: We are looking at almost 13-14% net realisation this year.

Q: Is that the operating profit margin because your PAT margins have been at 13.5% in Q4? Overall for the fiscal, you have touched somewhere around 16% or so. Do you think that's a level that's tough to achieve in FY12?

A: Yes definitely.

Q: Will you be able to achieve 16% level?

A: Yes.

Q: Have you planned any kind of capacity increase and fund raising to put on stream?

A: We are raising fund, but we have been planning for capacity expansion. We are awaiting some environmental clearance for the Uttar Pradesh project.

Q: How much would you be investing in the UP project?

A: We would be investing almost about Rs 15 crore.

Q: How exactly are you going to fund the Rs 15 crore?

A: We will fund it from the internal generation.