Range of new products to add higher volumes: Stone India

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Range of new products to add higher volumes: Stone India

In an exclusive interview with CNBC-TV18, Amit Mondal, Managing Director of Stone India, spoke about the road ahead for the company and his outlook for the sector.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Stone India to enter into JV with Japanies co; stk gains 6% ALSO READ See latest News about Stone India See previous management interviews See what other Experts & Brokerages are saying about Stone India Nifty BSE | NSE 28/05/12 Are Mutual Funds betting on Nifty?

Kolkata-based multi-product engineering company Stone India is set to enter into a joint venture with Japan's leading optical fiber services provider Sumitomo Electric to manufacture air springs in India. Stone India will export metal parts of air springs to Sumitomo.

In an exclusive interview with CNBC-TV18, Amit Mondal, Managing Director of Stone India, spoke about the road ahead for the company and his outlook for the sector.

Below is a verbatim transcript.

Q: Can you explain to us the details of your agreement with Sumitomo Electric?

A: We had an agreement with Sumitomo in November 2007. What we have agreed now depending on the volumes it is now showing to go up for the pneumatic suspension system and we are likely to convert this in near future into a joint venture because when you do a full-scale manufacturing and marketing then the cost is come down and Sumitomo being a large player they are interested once they come close to 50% market share.

Q: Could you walk us through exporting metal parts of air springs. How many units are these parts and how much does each unit cost?

A: That needs to be worked out. We are now in the midst of negotiating the final pricing. So that pricing is not yet fixed but what has been agreed is that we will export these metal parts to Sumitomo.

Q: The reason I brought this up is because your revenue is about Rs 23 crore in a quarter, last quarter it was about Rs 18 crore so you are about Rs 90 crore company. How much will this add, will it add Rs 5 crore, Rs 1 crore more than Rs 10 crore?

A: The pneumatic suspension system, the air spring part of it business will be adding something like Rs 20-25 crore in the next year which is very small amount this year. The metal export should be in the region of-to start with anything between Rs 4-5 crore.

Q: How much in terms of order book did you get from the railways in 2009 i.e. after the last budget and how much did you get after 2008 budget?

A: The pervious year our order book was around Rs 80 crore, this year would be ending the order book around Rs 110 crore.

Q: How can you reasonably expect your order book will go up by? Do you expect the railways to buy big in the current year?

A: Once the budget comes through and whatever we have heard the ministers and the board members, the rolling stock manufacturing is likely to go up by at least 30-35%. So correspondingly our order book will go up. But we have a range of new products which will add on much higher volume.