Richa Industries eyes Rs 240cr revenue in FY11

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Richa Industries eyes Rs 240cr revenue in FY11

Sushil Gupta, the MD of Richa Industries, in an interview with CNBC-TV18’s Ekta Batra and Reema Tendulkar, spoke about the recent happenings in the company and the road ahead.

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Sushil Gupta, MD,  Richa Industries , in an interview with CNBC-TV18's Ekta Batra and Reema Tendulkar, spoke about the recent happenings in the company and the road ahead.

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

Q: Your board will be meeting very soon on the 29th of this month. You are considering an expansion in your pre-engineering building (PEB) segment. This currently doesn't contribute much to your revenues and is just about 10%. Could you tell us a little more about your expansion plans and the capacity addition? What kinds of investment have you lined up?

A: We have lined up around Rs 50 crore of investment for the project, which will be put up at Bawal. PEB has already taken a major lead now. In the current year, we are looking at around Rs 100 crore of turnover from PEB alone. A total of around Rs 240 crore target for the year, Rs 100 crore will be from the pre-engineer buildings section.

Q: Could you tell us a little more about the funding of the Rs 50 crore? How much would be via internal accruals, debt or any kind of equity issuance?

A: There is no plan for equity issuance. For the funding arrangement, the board is meeting on 29th to work out on the bank funding and internal accruals. This is primarily targeted at pre-engineering buildings as well as heavy engineering sectors. As a major original equipment manufacturer (OEM) supplier, for all major manufacturers like L&T , BHEL and Thermax, we are planning to give them heavy engineering building materials.

Q: Currently, this segment comprises of around 10% of your revenues. Your main revenues are from textiles. Going forward, possibly in the next one or two years, what is the plan of proportion of revenues in both these segments?

A: Current year, 50% of revenues will come from PEB and the remaining 50% will be from textiles. In the next year, it is likely that PEB will cross over textiles.

Q: You spoke about the revenue target of about Rs 240 crore for FY11. What will be target for FY12, once this capacity expansion comes on stream?

A: For the next year, PEB will have around Rs 200 crore turnover, as against about Rs 100 crore of turnover for the current year. We are looking for almost doubling the PEB capacity. In textile sector, we will not increase any capacity. There will be a marginal 15-20% increase in turnover which we get every year.